Question about BUYING a home that was "given" back to the bank.

barbcollinsNovember 3, 2013

We are going to look at a foreclosure tomorrow or Tuesday.
This is one of the situations where the owner "gave the house back" with a Deed in Lieu of Foreclosure.

Does this opens us up to any special issues since the property did not transfer in a normal foreclosure.

Could any judgements or liens against the owner still be attached to the property?

These would come up in a title search correct?

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kabir

After the deed in Lieu and the bank etc the deed in their name, all the liens are taken care of. You should not have any problems. Concentrate more on he condition, pricing etc.

    Bookmark   November 3, 2013 at 9:43PM
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barbcollins

Thank Kabir,

And after posting I thought about this more last night, and realized that a bank is not going to accept a Deed in Lieu if there were other liens on the property etc.

I looked up the Deed and read through the whole thing and found these paragraphs.

7. No work, labor or materials have been supplied to the Property upon which anyone could base a mechanic's lien, equitable lien, or any other type of lien against the Property which have not been fully paid for.

8. Seller owns the Property in fee simple, or has valid leasehold title to the Property and the Property is free of any unpaid liens or judgments. Seller further represents and warrants that, upon the execution of the Deed, Lender will acquire and have good, marketable, and indefeasible title to the Property.

From what we have seen so far condition is terrible. There is a tarp on the roof. The cedar siding has been neglected and is weathered and split. The top of the chimney is missing. Gutter is falling off. Grass hasn't been maintained all summer. Real Estate listing starts with "Enter at your own risk".

Woo Hoo! I can't wait to see the inside ;)

    Bookmark   November 4, 2013 at 6:49AM
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StellaMarie

I'm not an expert by any means, but please get a knowledgeable lawyer involved in the transaction to make sure you're protected. It's one thing for the seller to make representations to the lender that there are no other liens and another thing for there to actually be clear title.

    Bookmark   November 4, 2013 at 12:57PM
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barbcollins

Not going to happen.

Went up to look at it today. Definitely a tear down.

    Bookmark   November 4, 2013 at 6:15PM
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