How a Tax Foreclosure Auction Affects the House Deed & Title

http://www.amerifirst.com/investing-in-real-estate/ Tax foreclosure auctions - they're often touted as a good place to find great deals on homes for investors. Many times these houses sell for thousands less than what the market around them is going for. It's a tempting proposal for new investors and home buyers alike. But there are some things to keep in mind when considering buying at a tax foreclosure auction. First, these sales are cash or cashier's check only. You're not financing a home purchase with a mortgage. So before you think about going to your county's tax auction, be prepared with cash reserves. Also, a house bought at tax auction will likely have a quit claim deed rather than a completely clear title. One county treasurer we talked to says it's just part of the process -- when they foreclose because of unpaid taxes, everyone SHOULD be notified, but it doesn't always happen in the eyes of a title company. (Mary) The head of Devon Title in Kalamazoo weighed in on the issue as well. Curt Dinkelmyer says it's one of the risks in real estate investing, but it's not the end of the world. (Curt) Investor Jeremy Cole says knowing ahead of time is half the battle. In one deal he was a part of, he didn't realize it was an issue until he was about to sell the house he bought at auction, after sinking a bunch of money into the rehab of the house to make it a nice home. Once the new buyer was about to close, it was discovered that the title wasn't clear, and they had to go through a few months of making sure the title was totally clear before the buyer could take possession. Now Jeremy handles it all up front. (Jeremy) So if you're an investor, talk to your county treasurer about your options to get the title cleared. (Mary advice?) And if you're a home buyer, ask the seller whether the home was bought at a tax auction. Martha Wilbur is a homeowner who almost had her deal collapse on her, because the seller didn't realize the title had to be cleared. After waiting 3 months, the deal came through and she was able to breathe a sigh of relief. (Martha) A tax foreclosure auction can certainly be a good place to get into real estate investing, or find a home of your own. Just be aware that it's not always a simple task -- it takes patience, work and knowledge. For AmeriFirst Home Mortgage, I'm Dan Moyle. Address: AmeriFirst Home Mortgage 950 Trade Centre Way, Suite 400 Kalamazoo MI 49002 AmeriFirst Home Mortgage is a home buyer's resource center and community mortgage banker. We focus on educating homeowners and home buyers in the details of the housing market and more. AmeriFirst Home Mortgage is a division of AmeriFirst Financial NMLS ID 110139 | Equal Housing Lender