Northern Virginia Home Buyer-Buying Property at the Virginia Court House Steps
My novice
Northern Virginia investors get
excited when they read the listings of property for auction starting
bid at $10K in local newspaper such as Washington Examiner or Washington
Post. Every investors dream is to buy "steal deal" and flip it for
profits. However sometimes these deals can cost you everything!!! So
before you run with your hard earned cash to purchase that deal here are
few thing to consider.
DID YOU KNOW???
When buying at any of the Northern Virginia Court house steps:
Auctioneer does not guaranteed clear title The home may have other liens apart from the auctioned lien. Any tax lien including IRS, local county taxes you will be responsible to pay off apart from purchase price. Title insurance company won't under write the insurance for these properties. Without the legal proceeding of foreclosure, all subordinate
liens remain attached to the property!! Including: Home-equity loans
(HELOCs), any construction liens, second loan, mechanic liens etc. You
are responsible for the outstanding debt. Good luck with getting inside the home...hence you have no
clue what inside condition of the home is or inspect the home
beforehand. If the property is occupied you are responsible to evict the
occupant. You may have to compensate the occupant to move out of the
property. All Deals are CASH Deals! You have to close within 15- 30 days! 99% of the homes are repurchased by the banks. They have their representatives at the auction. Last minute cancellation! Lot of the auctioned properties are
pulled out due to one reason or the other at the day of auction. So if
you show up and the property auction is cancelled you wasted all that
time, energy and resource in finding the deal. If the property is truly a deal, beware you will be a small inexperience fish with experienced sharks around you. So here is an example for worst case scenario:
You purchased a
Fairfax County home at an auction
for $50K. Later found out that the home has tax lien of $15000, HOA
lien of $1000 and an HELOC of $100K. You add up you purchase price of
the property plus outstanding debts of $116K +50K that is $166K. If the
property is worth in a given market for only $125K you now have got
yourself into a huge loss.
Apart from the above debt situation, there is no way for you to know the
condition of the property. Are the appliances missing, what if property
has extensive mold or water damage, any easement or HOA violations and
so on? Above all if the renters or the owners refuse to move out you
have to go through Sheriff's office or higher an attorney to evict the
occupant.
So what you can do before you invest or buy at the court house:
-- Research, Research & more Research...learn everything and anything you can about the property ahead of the time.
-- Go observe other auctions before the auction date for the property you are considering.
-- At auction properties are purchased for CASH only!! Get your funds
ready. If you don't close in the time frame given you lose your deposit.
-- Team up with the Title company and/or go to court house and pull up every record related to the property.
As a
Virginia residential real estate investors
there are plenty of opportunities for an investors for example I met an
investor who sends 1000 mailers a month to distress property owner.
They will negotiate short sale with the home owner's lenders and take
over the title under the company. Some they hold, others fix it and flip
for properties. Other option is to bid on a REO (Real Estate Owned)
property also known as foreclosure listing on your local MLS. You will
receive clean title of the property and you will have option to inspect
the property.
Links:
Northern Virginia MLS for your Home search
Fairfax County Court House
Loudoun County Court House
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