Profile picture for belike23

I need someone to advise me on what liens I am responsible for if I purchase a property,

at Sheriff's Sale.  I realize that I must do a title search prior, but if the mortgage is owed far more than the home is worth, am I reponsible for the original  mortgage, or is it released from the liens?  Any advice will be greatly appreciated.  I am looking for advice for NJ.
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January 27 2011 - Woodbury
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Profile picture for TomBJF
Buy the book Foreclosure Investing for Dummies. It sounds dumb but it's a very good read. It'll answer these types of questions.

There are certain types of liens that remain attached to the property. Others go away. It's not that scary and you get a better deal but there are some risks. If you're willing to take them.
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May 19 2012
There are significant risks in purchasing a home at Sheriff's sale in Minnesota. You could encounter issues with title work as well as the property could incur significant damage while you wait for the redemption period to expire. It is best to wait until the home goes through the redemption period and becomes bank owned.
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January 29 2011

Chances are pretty good that the bank will be at the auction and buy it back themselves then list it as an REO.  - be prepared for that too.  Talk with a professional in the area that can advise you on options and course of action etc.

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January 29 2011
This is why you should wait until the property becomes an reo (real estate owned) property.  Foreclosures are homes foreclosed on the bank and attempted to be resold at auction.  REO is when the asset manager for the bank lists and resales a home via a Realtor whose handling the sale for the asset manager and the bank.  Once the property is listed for sale via a Realtor, the bank is guaranteeing that the property is free and clear of all liens and you will have a right to inspection.  In a sherriff sale, you are receiving a property "as is" without a right to an inspection and with possible liens on the property.  Sherriff's sale not the best way of purchasing a foreclosure.
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January 28 2011
Belike23 Or Michael Jordan...

I agree with Ronald, buying and investing in foreclosures is no small task.  Infact I pay a staff to work 40hrs a week researching properties to purchase at foreclosure/sheriff sale, we have a title company in our pockets,and I still LOSE.  Yeah, it is easy to make mistakes.  It would behove you to partner with an expert.  Don't be affraid to split profits, or even have to pay more than your share to the expert.  Better to pay a professional X% of profits than to LOSE $$.  Best of luck.

Ps.  If you have found this to be a helpful and resourceful answer please mark it as best answer.  Thank you.


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January 27 2011
it sounds like you are not very experienced in these type of purchases... and it also sounds like you could lose a lot of money.

Do not invest any serious amount of money based of advise onthe internet... instead meet qualified professionals with a track record that can mentor you to the process... baby steps...


Best of luck!

Ron Escobar, MBA
Broker
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January 27 2011
In these matters you need to consult  Real estate Attorney ! Do not waste time consult an Attorney for advice and right steps to buy Auction homes
or Sheriff's Sale .Also you read carefully in the new paper the homes of sale then research the home of your choice .Attorneys will help in Title search for a small fee of service and FREE Advice !
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January 27 2011
You should use a title company to do your title search.  Ask them to include a special tax and lien search too.  Beware of tax liens of all types.
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January 27 2011
Hello,

Even in NJ all counties have their own ways. Title search is very important. If the property is being auctioned at Sheriff;s sale, it means that the bank has won a forclosure case against the home owner and now the property is being auctioned at the sheriff;s sale. Like Craig said, bank has its own representation at the sale. They will keep bidding until the satisfaction amount indicated by the bank.  

To answer your question, you should not be liable for original owed mortgage, but you may be liable for other liens. These liens are normally disclosed at the sheriff's sale when they are announcing the property for sale. You have to listen very carefully since they go so fast. Try to sit there couple of times as trial to learn the process, before you start bidding on a property.

Good Luck!! Be Ware!! 
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January 27 2011
When you are bidding at auction, beware, and as you mentioned, running a title search is extremely important.

If the bank(or bank representative) shows up to the auction, they will bid up to the amount owed, which may be more than you are willing to pay, thus the bank will take title to the property and list it with an agent to sell as market value or as close as possible.

If the bank or their attorney does not show up, there is a good change you can purchase the property at a steep discount.

In Florida, sometimes people win at the bidding, only to have the sale overturned, because there was no public notice, or the lender filed a motion to postpone, but the property was still auctioned.


Auctions are always an interesting event.  In Palm Beach County, everything is online, and a lot of NEW investors are bidding on properties with huge liens, but the Homeowners Association was the agency to foreclose.  People think they bought a $300,000 house for $6,000, only to find out the bank has a mortgage for $400,000.

Although you would not be responsible for the debt, the bank will foreclosue their lien on you and take back the property.

As you can see, it gets pretty complicated.

Before you venture into that area, watch and learn, before making newbie mistakes.

Good luck!
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January 27 2011
 
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