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If you buy a house at a foreclosure sale do you outright own it?

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If you buy a house at a foreclosure sale do you outright own it?

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  1. Did you pay for it with all of your own cash? Bought it at auction on the courthouse steps and it was free and clear of liens? Then, yes, you bought the property and it is yours.

    Does it have liens? Those belong to you now, too!

    If you took a mortgage to buy the place, well, the bank outright owns it until you pay off that loan.

    State and local law govern your situation.


  2. If you get a deed for the property and clear title - then yes!

  3. Maybe. I say maybe due to many variables that can impact a foreclosure sale. IF the person files bankruptcy before the sale, that will make your purchase void. Federal tax liens can prevent you from getting clear title. Any back property taxes or homeowners association dues in which a lien has been filed prevents you from getting clear title. I've purchased several homes during traditional foreclosure sales. The first one I went to, I purchased a condo for about $30K under market. I was very excited to say the least. Shortly after the sale, I visited the house. To my surprise, there was a bed-ridden 94 year old woman in the house. After calling and speaking with the daughter (who mortgaged the house without her mothers knowledge since she had POA) I found out she had filed bankruptcy on her mothers behalf earlier that morning. The people conducting the sale were not notified about her filing in time. Aside from that, I found out that there were $14K in HOA dues that were owed. If the HOA would have done their job and the person would not have filed bankruptcy, I would have been responsible for the HOA dues and evicting the old woman.  Bottom line, do your homework. If you are thinking about buying forclosures, contact an attorney, pay them a couple hundred bucks the day before the sale and have them do a title check....then the morning of the sale, go to the court house and check for any new filings.

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