When you buy property at auction in a state that has redemption laws, you get a special deed or special title. Because the owner has a number of months in which they can repay the purchase price and redeem their property, it's called a defeasible title. That is, one that can be defeated, which means that you don't have clear title yet.
Redemption Rights: If you buy the redemption rights from the owner at the time of the auction, you will own the title and the rights and therefore be able to get clear title. A redemption purchase should also be notarized. You should consult a local attorney, because each state differs in the way in which this should be handled.
Whenever you make a purchase such as this, you can always buy the redemption rights from the owner -making the title you hold clear, or in simpler terms: permanent. It's always a good idea to consult your real estate lawyer with regards to handling this type of case as the laws differ from state to state. If you're not careful, you can and will get screwed over.
Furthermore, there's a good chance that the owner you're buying redemption rights from is currently handling a great deal of stress -their property is being auctioned off! It's likely that they're not aware of the equity. You however, as the buyer, should be aware of such. Tradition and, well, ethics pertain to the rule of thumb: $1500 for redemption rights. Should they ask for more, check the property's equity and again, consult your attorney.
This note is used to buy property, and comes with a security instrument -a binding legal contract that ensures you pay the note in full. This is called a deed of trust, or more popularly, a mortgage (though the two are different things). Should the borrower be unable to pay the note in full, the lender can take the borrower to court, or even put the property under foreclosure -the process of taking the property as collateral for the money borrowed.
Notes, deeds of trust, mortgages, real estate -an overview
3 parties are always involved in a deed of trust sale:
Trustor: otherwise known as the Borrower
Beneficiary: Whoever lends the money (aka mortgagee)
Trustee = Party handling the transaction
In a deed of trust, the trustee handles the foreclosure for the beneficiary; in a mortgage, a lawyer handles the foreclosure for the beneficiary. A mortgage and deed of trust are two separate and different things, but perform the same function -acting as security instruments until the property and loan is completely paid off.
There are two major strategies in the foreclosure business:
Short Sale
Short Sale
Sometimes however, should the property and case require it, there is the "subject to" transaction which bases purchase on the existing financing of the real property.
Redemption Rights: If you buy the redemption rights from the owner at the time of the auction, you will own the title and the rights and therefore be able to get clear title. A redemption purchase should also be notarized. You should consult a local attorney, because each state differs in the way in which this should be handled.
Whenever you make a purchase such as this, you can always buy the redemption rights from the owner -making the title you hold clear, or in simpler terms: permanent. It's always a good idea to consult your real estate lawyer with regards to handling this type of case as the laws differ from state to state. If you're not careful, you can and will get screwed over.
Furthermore, there's a good chance that the owner you're buying redemption rights from is currently handling a great deal of stress -their property is being auctioned off! It's likely that they're not aware of the equity. You however, as the buyer, should be aware of such. Tradition and, well, ethics pertain to the rule of thumb: $1500 for redemption rights. Should they ask for more, check the property's equity and again, consult your attorney.
This note is used to buy property, and comes with a security instrument -a binding legal contract that ensures you pay the note in full. This is called a deed of trust, or more popularly, a mortgage (though the two are different things). Should the borrower be unable to pay the note in full, the lender can take the borrower to court, or even put the property under foreclosure -the process of taking the property as collateral for the money borrowed.
Notes, deeds of trust, mortgages, real estate -an overview
3 parties are always involved in a deed of trust sale:
Trustor: otherwise known as the Borrower
Beneficiary: Whoever lends the money (aka mortgagee)
Trustee = Party handling the transaction
In a deed of trust, the trustee handles the foreclosure for the beneficiary; in a mortgage, a lawyer handles the foreclosure for the beneficiary. A mortgage and deed of trust are two separate and different things, but perform the same function -acting as security instruments until the property and loan is completely paid off.
There are two major strategies in the foreclosure business:
Short Sale
Short Sale
Sometimes however, should the property and case require it, there is the "subject to" transaction which bases purchase on the existing financing of the real property.
About the Author:
Want to know more about real estate? Log on to Don Burnham's website http://www.weknowthewayback.com and know everything from redemptions and foreclosure all under one roof.
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