Senior Foreclosure
What’s the best way to go about obtaining a foreclosure report on a property before bidding at a trustee sale?
I want to bid on properties at trustee sales in Orange and San Diego County, California, but before I do I need to check the properties ahead of times to make sure there are no outstanding liens and also that I am bidding on the senior lien and not some other junior lien. I have been told to check online with each counties recorders office, but have had no luck doing so. Have also been told to start at the county courthouse doing the research manually, but also have hadn’t any luck figuring out how to go about that. I have the money to invest in a few foreclosures, but I want to do it via trustee sale, as opposed to short sale or REO, and I am just trying to cover all my bases as I know trustee sales can be very risky. Anyone who has experience with trustee sales in either Orange County or San Dieg county, any advice would be greatly appreciated. Thanks.
I am an educated real estate investor who became a licensed real estate broker. I know the foreclosure process inside and out and practice in Orange, San Diego and Riverside County.
First off, to answer your question, you need access to a title company to get the lien information to see if the credit bid at the trustee’s sale is for the first, second or third position. Even websites like www.realtytrac.com can’t tell you the position of the foreclosing lien holder.
Now to address your question. Very rarely do you get a good deal at a trustee’s sale. That’s because very rarely does a property with equity go into a trustee’s sale and if it does, very rarely does no one show up to bid on it.
Also, the answer which told you that trustee’s sales are not risky was incorrect. Trustee’s sales are risky not because you don’t know who is foreclosing (or existing liens, such as Tax liens, which will stay with the property), but because you generally do not know the condition of the property. It could have foundation or structural issues. It might have mold or plumbing issues. It could be so messed up that a conventional lender will not lend money on the home, thus affecting your holding cost and/or exit strategy.
It is of my opinion that the best place to pick up a home is in pre-foreclosure by doing a short sale. Some REOs are good, but they are usually 10% below market value or at market value. The only way to pick up REOs at a good rate is to buy them in bulk, but then you run into the risk of not knowing about the individual properties.
Feel free to contact me if you have any further questions. Depending on your exit strategy and what you are trying to accomplish, I might even be able to help you out with the information you need.
Regards…
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