If you are considering buying a property at a tax foreclosure auction, there are many RISKS you should be aware of. Remember, auctions are BUYER BEWARE sales. I can’t stress that enough. The County will make no representation about anything regarding that property, so it’s up to you to deal with the issues and do your homework.
There are different types of foreclosures. The type I’ll address here are tax foreclosure sales in Washington State, specifically Snohomish County. Even if a property has gone through a tax foreclosure sale, there are still circumstances where a prior owner may have rights to the property.
If the owner of record is a minor or adjudicated (found in court) to be legally incompetent, they can redeem the property ANYTIME within THREE YEARS from the date of the foreclosure sale.
The parcel will be sold subject to existing liens on the property. These include any special assessment liens, taxing districts, easements, utility liens, etc. The county makes no guarantees that these lien holders will honor the sale. That means if they decide to collect on the lien, it is entirely up to you, the new owner, to defend against these claims. That means, more of your time and money to keep the property you just “bought.”
Also, some government liens have a redemption period of SIX MONTHS. That means, six months after the foreclosure sale, a government entity like the Internal Revenue Service, can elect to take action anytime until that point. Again, it will be up to you to defend against it or pay it off.
In addition to the redemption periods, for an owner who has foreclosed on a property, they may end up staying in the property for months or even up to a year. For trust deeds, they will typically given four months to move. That is of course, considering you don’t need to go through the eviction process.
If you are still considering heading out to the auction block, make sure you are well prepared.
If are interested in finding the true deals and saving yourself time and a headache, let me know. There are great deals in every market, you just have to know what to look for.
Jen Hudson, GRI (360) 652-1200 or email@example.com