[quote=universal_giant;11999252]Hi All,
I am a newbie to the Foreclosure Sales Auction/sheriffs auction business. I live in NJ.
In NJ, the successful bidder shall produce 20% of the bid as a deposit at the auction (cash or certified check) and the balance will be due in 30 days; and the property can be redeemed by the owner up to 10 days after the sale.
So, after few months of research, I still have a lot of questions that are puzzling, here are my questions:
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Originally Posted by universal_giant
1. I know that before the bidding start for certain property in the auction, someone (it could be a broker or an attorney) that will disclose all kind of debts that this property carried. Are these the only debts the winning bidder will have to take care for? Or there could be other debts that are not disclose during this process? I am just trying to understand will the winning bidder in deep trouble for winning the bid for this property, due to other undisclosed debts.
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There may be other debts that are not disclosed by the rep at the sheriffs auction. You can go to the county records department to research outstanding liens, or you can have a title agency do the research for you. I've recommended an agency to a couple of people, and the cost is usually $200 -$300 per property. Do this search before you go to the auction, and only bother with it if you are serious about the property.
Quote:
Originally Posted by universal_giant
2. Let's say I am thinking to bid for a property with a judgment amount of $90K, and the market value for the property is $1.5 million,and the owner has foreclosed the house atleast 5 times in the past 15 years, by looking at the past bidding history, it shows that some foreclosed properties in the past had sold for about 50% of the judgment amount, this sound too good to be truth, but is very tempting, what are the hidden or possible risks based on the scenario describe above?
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Some properties are indeed sold for a very low percentage of the amount owed on them, but not most. If a property has a judgment amount of $90k and a market value of $1.5mil, you can bet that there is other debt on the property, else the owner would simply refinance it or sell it and pay that small debt.
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Originally Posted by universal_giant
3. If the owner is still living in the property, and I have checked that it has 1 mortage that pay towards the house, and few other equity that the home owner borrowed to fixed or upgrade the house, will there be other debts such as equity loan that I can't find through title search? And will I as a winning bidder has to pay for those debts that I can't find in the title search?
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I'm not sure what you are asking here. You say there are a few other equity. I assume you mean equity loans. Most of those should be findable through a title search. It is possible there are other debts as well, such as mechanics liens and unpaid taxes & municupal utility bills. Of course, when you are buying the property, you can get a full title search done, and purchase title insurance to cover you agaisnt the possibility of leins that aren't found by the title company.
Further, if the owner is still living in the house, be aware that the sheriff will not evict them before the auction. The new owner will have to take care of that.
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