<p>It is a deed that has no title covenant，it is just a deed that the seller will not claim the rights to the property, but another party may claim the title and you have to fight for it. Normally it is a title transfer between close relatives such as amount brothers, if they inherited a property, one of the brother may grant quit claim deed to another brother. This kind of deed is highly risky between two strangers because you don’t know how many sellers entitled to the property. You bought that quit claim deed from one seller and maybe later on seller’s brother shows up and claim that he owns a part of it as well. No title insurance will insure those quit claim deed because the title is not searched prior to the transaction.</p>
<p>Regarding VA and FHA loans, I won’t accept any of the buyer who is applying that kind of loans. I will take cash or conventional only.</p>
<p>Hi coralbrook, I just stumbled onto this thread, thanks for sharing. I have a question. You mentioned that it is necessary to do a title search, but don’t all liens disappear, once a foreclosed property is sold at a sheriffs auction?</p>
<p>In CA, a non-judicial state, deed of trust is used in foreclosures. On the auction steps, any one of the deed of trust could be offered, so buyer must be aware and search the title to see the deed of trust offered is in which position. If you bought a deed of trust in third position, for example, you have to pay off the first and second deed of trust to clear the title.</p>
<p>In a judicial foreclosure, all mortgages are consolidated for auction and all debts will be cleared of title.</p>
<p>I am assuming you are asking about title as searches for foreclosed properties. There are several different types of auctions where you can purchase real estate:</p>
<p>Tax lien auction - unpaid property taxes</p>
<p>IRS auction (well really sealed bid kind of thing)</p>
<p>Non judicial foreclose auctions held in public places, as explained by Artlover. You are bidding on buying the recorded mortgage trust deed and there are several"liens" that could have higher priority.</p>
<p>Judicial foreclosures in some states where defaulted loans are sold by the Court.</p>
<p>Sheriff auctions which is a wide term that could be selling property the City or County has taken over by legal means such as drug bust assets or something.</p>
<p>REO auctions where the property went to sale at a foreclosure auction and no one bid on the property (lender sets opening bid but it cannot be higher than what is owed on the loan plus default fees, interest owed, legal fees and a bunch of other costs). The property ownership reverts to the lender that foreclosed, subject to priority liens. Some banks try to sell their"Real Estate Owned" (REO) properties on the MLS and other banks have signed contracts with Auction.com to sell their stuff through ballroom live auctions or online auctions. That kind of failed for the banks because the bank would set $400 as their opening price and then Auction.com would arbitrarily make a teaser marketing gimmic claiming opening bid $300. People would be lured to the auctions thinking tgey</p>
<p>When you purchase an REO bank owned property you will get full clearance on title and title insurance because it is a regular purchase through escrow, etc.</p>
<p>^^ Am selling the REO property bought in Dec 2012, in an auction not from the steps, the Bank only offered quit claim deed, which is more less like trust deed sale. It went through escrow, but NO title insurance. I guess that is another kind of sale.</p>
<p>Also bought two houses earlier in 2012 from the same auction with title insurance and grant deed, they were bank REO. </p>
<p>Now a days, bank will offer either quit claim deed or grant deed depends on whether the home is occupied or vacant. If the home is vacant, bank had a chance to inspect the home, more likely grant deed and title insurance will be offered. Occupied REO homes, banks will not offer grant deed, so quit claim deed is offered. There are exceptions and thing got complicated, I will not go on to write a dissertation here. :)</p>
<p>The above is in the REO arena, not the Foreclosure arena.</p>
<p>Sorry, let me try to finish about Auction.com because it is a sore subject to me.</p>
<p>So they have these big auctions with huge advertising in fancy ballrooms. They really believed, and they convinced the banks, that they were going to bring in thousands of Mom and Pop buyers and the bidding would go into a frenzy. They would have’Open Houses’ with some low end agent for about 1 hr the weekend before. </p>
<p>Well, they did get thousands to show up for a year and it would go like this…</p>
<p>Tuxedo guys all over the ballrooms in your face hyping the bidding. Very scary environment for Mom and Pop. Also, do you think any decent hard working educated qualified buyer is going to buy something sight unseen, no inspection for full price??</p>
<p>Bidding might make it to about $350 and the auctioneer would lower the gavel and then yell “SOLD” and then mumble"subject to reserve". Well the reserve clause was hidden in the fine print" well, also hidden in the fine print was the"buyer premium" of 5%. So if you actually did get the property you are going to pay $350 + 17 or $367 for that property. The way Auction.com made their money was to take the commission that would have happened on the sale.</p>
<p>But in reality, that $350 / 367 “winning bid” was really just an offer made to the bank seller. But this time you had to put a large deposit at the auction and think “I’m the winner”. One to two weeks later you find out that the bank does not accept your offer and you’ll get your deposit back in 10 more days.</p>
<p>The other aspect of these auctions is you can imagine what type of buyers were a large percentage of the bidders?? People who will not qualify for any kind of loan. The only requirement to get your hand on a paddle was a deposit of $5,000. So all if these hopefuls would get their hands on 5k and think they were magically going to get a house. Well, those transactions failed quickly also.</p>
<p>At the end of each auction at least 25% of sold propertied came back up. That’s when a good deal could be found because most other buyers had gone home.</p>
<p>In our region this lasted a year and miserably failed. Now they try to do these sales online but that’s a whole other story:)</p>
<p>btw, title insurance CAN be bought for a trust deed obtained through a foreclosure sale, with a price. But I have not been able to buy a title insurance for a quit claim deed.</p>
<p>Yes it is very true. I have been “rejected” as a high bidder before and they try to “negotiate” for a much higher price and I did not accept. They put it back in the next auction and I was still the highest bidder. They sold to me below the reserve after all. At the end I did not get any bargain as the bank sold me a house full of lunatics and bank knew it. :)</p>
<p>But now a days, auction wants to see your bank account before even let you sign on the dotted line.</p>
<p>I watched a few episodes of HGTV’s “Flip or Flop” last night, with the Southern California real estate couple who always seem to make a profit. They bought a house in a very good neighborhood sight unseen and discovered that it had been completely vandalized, up to and including the vandals putting cement – cement!!! – in the toilets and bathtubs. Obviously the house needed a lot of plumbing repairs.</p>
<p>What I can’t figure out is that, at the end of the show, they had fixed the plumbing and also redid the kitchen, put in new windows, yada yada, all for only $29,000. How is that possible?!</p>
<p>Very Happy,
I would not be able to do that for $29,000. I don’t know how they did it for that low. Maybe, just maybe, if they didn’t have to touch any other infrastructure except plumbing, did not have to put in new flooring (don’t know how they got away with that), did not have to paint the exterior, HVAC system working perfectly, no water damage anywhere in the house, and on and on.</p>
<p>There are a lot of guys out there that claim they can flip these 2,000sf homes for $20-$30k but I just don’t want to do that. It would not be a fulfilling career if I spent 8 weeks turning an ugly broken duckling into just a limping duckling.</p>
<p>Artlover, did you purchase those REOs at the Auction.com auctions? Or some other auction? I don’t think we have any REOs in Southern California that come out at auctions anymore.</p>
<p>We have the first set of kitchen cabinets installed!! and we have our master shower trimmed in with hardibacker and paper, ready to tile. Put some kitchen cabinet pictures up to our group. We are still installing an island across from the sink (which will really close in the house, but it is necessary to have a functional kitchen). We are going to fudge around with it on Monday to make sure it is in the exact right spot, then we are going to have to get under the house and finish the plumbing from dishwasher to sink and drains.</p>
<p>yes I did. They still have some in Northern Cal. but the price is sky high and in bad locations where you don’t want to be. The house I am selling is in a location pretty bad. The gas station across the street was robbed under gun point few weeks ago. But that is not the worst, the Northern Richmond area has gun fight every other week, just like in those Western movies.</p>
<p>For around 230K cost, including renovation, I could rent the property for $3500/mo, higher if it is section 8. That is a very high return, but I opt to sell it because I do not want to be a slumlord. :)</p>
<p>VeryHappy, I remember one house our real estate agent showed us after we said we’re fairly handy people and were willing to do some work. It was a beautiful house from the cube, minus all of the lighting fixtures that had been torn off the walls and fence. Also the big hole in the ground where a fountain had probably stood. Go inside and what was likely a stunning living room with wooden floors had had buckets of white paint dumped all over. Go into the kitchen, and all of the cabinets are missing (they even took the kitchen sink!). Check the first bathroom, it looks like they got kicked out halfway through ripping all the tile out around the Jacuzzi. Next bathroom was lacked a toilet…just a hole in the floor with some gifts (plus somehow a hole in the wall that went straight outside). Go to the backyard, and there’s a pool with mosquitoes flying all over the place. We get out of dodge at that point, and while leaving see the a paper in the front yard warning of West Nile virus! Later that week we actually saw a news story about the neighbors suing the bank who owned the property since they had repeatedly asked them to take care of the mosquito problem, and one of them actually caught West Nile!</p>
<p>All that said, I’m sure someone wound up getting that place for a steal and made a bundle on it. Was a really nice piece of land, and I’m sure the house could have been prettied up nicely.</p>
<p>I honestly do not know where these people take this stuff they pull out of their houses. Every foreclosed house I see has all the appliances missing. Where do they take all these appliances? How do they store them or sell them? I mean really, you’re moving under the gun. Trying to find a rental and you need to drag appliances around with you, every now and then I look on Craigslist expecting to see thousands of appliances and they aren’t there.!</p>
<p>^^RR, I am sure cb would be of interest, at least she does not have to tear down all the walls inside and out. As I can see it, the house you described is in GOOD shape.</p>
<p>I would have bought that in a hot second!! As long as the price was right. You have to change out all that stuff anyway. I especially love when the kitchens are gone. No cost to demo out! And it turns off all the other buyers when the kitchen is missing.</p>
<p>Actually kitchen cabinets are not that expensive in the grand scale of total cost. When you have to do a total reno with a vacant house it is easy to do. What scares everyone is the cost to redo the kitchen when the house is occupied and the contractor has to keep everything clean.</p>