I would like to bid on a home near me pretty soon at a foreclosure auction, but I am very confused about liens. If I bid $50,000 for the house and win who could I possibly owe money to besides just paying the guy at the courthouse? If the current owner has a mortgage would I owe anything on that? If he has IRS taxes? Or does the auction wipe out all of that?
I am assuming the first lien holder is selling the property. If they are inferior to the first lien holder you will be liable for the first or 2nd and so on. So find out who is selling. If it is the first then any other liens where the borrower actually borrowed money and signed the documents would be wiped out provided they were given proper notice.
The IRS does not go away or property taxes and HOA dues or any other liens like from the City or County for trash removal etc. Hope this helps some
in most cases, they should disclose any leins due with an estimate, taxes, sewer, water, ect…they won 't be an exact amount , but usually they are close…your bid, is what’s gonna cover the mortgage owed…and you’ll be responsible for any leins over that…
I am in IL and they do not tell you about the liens at the auctions, they do not even say if the first or second is being auctioned, here it is bidder’s responsibility to find out everything.