When it comes to tax foreclosures real estate investor can find some great buys. However often investors go in blind and don’t find out about a major pitfall with tax sales until they go to resell the home. In a previous post we did about the tax auction we explain the basic process of how to acquire one of these properties and with the sale right around the corner (Aug. 18, 2014) it time to hear the rest of the story.
Check out the video below where we interviewed some people who know first hand what’s involved with passing clear title.
Most of the times a property purchased at the auction will have a clouded title. The basic problem is that when the property is resold the title company won’t insure it and therefor the buyers lender won’t lend on it. This is because the county didn’t notice the previous owners property, well they did according to their rules, but not enough to get the title company comfortable issuing insurance. The county is only required to mail out a notice, rather than have the previous owners actually sign acknowledging they received it. So its possible to have someone comeback years later claiming they have an ownership interest in the property. Not good!!
So what’s the solution. Really there are two options, if the county is willing to help, the investor can deed the property back to the county and the county can go in front of a judge and have things cleared (this takes about a month). The other option if the investor doesn’t want to hand the property back over the the county is to hire an attorney and private investigator to properly notice the former owners. Assuming they don’t make a claim the investor can get clear title.
At the end of the day none of this is all that big of a deal as long as the investor does all this upfront. Investors should do the following:
Check out our interview with Mary Balkema (Kalamazoo County Tresurer), Curt Dinkelmyer (head of Devon Title Company), Jeremy Cole (Tax Auction Investor), & Martha Wilbur (home buyer).
To view properties for sale at auctions in Michigan visit www.tax-sale.info
One of the biggest myths out there is that you need a bunch of money to buy a house. That’s simply not true. There are a number of No and Low down payment options for home buyers. On top of that you don’t have to be a first time home buyer to access many of those programs. During our next lunch and learn we will cover all the different options out there for buyers looking to minimize their down payment. Over the last couple years its been harder to get a lot of these types of offers accepted. However, with the market going back to a much more “normal” state it’s not nearly as hard as it was just a few short months ago. This is the perfect time for Realtors to reconnect with their past customers and get back out there looking. Come check out this lunch and learn and get a refresh course on low down payment options for buyers!
Here is a list of some of the things we will cover during the event:Visit Jeremy's Blog