The Trustee Sale-Where Did All Those Liens Come From?
A key component when purchasing a property at a Trustee Sale (or any sale for that matter) is to research the chain of title. You can typically purchase a ‘”limited title report” for $80.00 to $110.00.
There are two main reasons why you need the title history. First, you need to be sure the foreclosing lien holder is in first position. Second, you want to verify that there aren’t any IRS, property tax or mechanic liens on the home.
Keep in mind we’re buying a “lien” vs a “property”. Not doing the proper research could cause us to buy all “liens” without our knowledge and drastically increase our liabilities and responsibilities.
IRS liens are very rare but they do happen. The IRS has redemption rights meaning they can seize the property within 120 days of being notified of the Trustee Sale. Notified is the key word here as the redemption period doesn’t start until the notification to the IRS.
Mechanics liens can get a little tricky with verifying if they are actually valid liens and tracking down the lien holder to see if a settlement can be reached. You may want to contact an attorney otherwise it might be in your best interests to pass on the property.
The less threatening and most common type of liens are property tax liens. These liens are almost always present on foreclosure properties. The property tax lien usually does not affect the buyer’s profit margin. They also do not have to be paid at the Trustee Sale.
Trustee Sales in Arizona can help investors and homeowners gets great prices on homes in the Phoenix area but you need to do a little homework regarding the value of the property and the liens being purchased and acquired by the successful bidder.
The successful investor or bidder can have huge rewards by preparing themselves accordingly. Now is one of the best times to buy homes in Arizona real estate.
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