Hey there. Can anyone tell me who actually owns a property in the time between an auction sale and the moment of closure?
I am planning to bid on a property on Tuesday, and if successful I am thinking of giving the owners several $k as an incentive to vacate quickly so that I can start some rehab work and ensure a successful appraisal for a traditional mortgage (this would be our primary residence). But that could mean that the property is vacant for a few weeks before closure. Does anyone see that as a problem (maybe insurance?)? Is this a crazy strategy to pursue?
Not sure what state you are in. If you are in a Trustee state (like NC) Before the auction the Trustee substitutes the benefeciary… so the homeowner no longer owns the property once it there is a substitute assigned. Now the homeowner can buy the property back at auction.
In mortgage states (like MI) the homeowner owns the home until auction, at auction the winning bidder now is deed holder, which is placed in escrow until the redemption period has expired… but the homeowner has rights to redeem the property back for 6 months. Most Mortgage states have some period of redemtion. Until you have the deed… I would not be paying any incentives for moving. Moving money is not a bad idea… just make sure the house is yours.
I am in MD, which is a trustee state. I understand that there is no right of redemption. At what point does the Trustee substitute the beneficiary?
Would you also still say that we shouldn’t pay any incentive until after closing? I agree, it makes me uneasy. But at the same time, I risk not getting a traditional, low interest mortgage (by not being able to do some minor work to clean the place up) and having to go for a higher cost rehab one. That’s also a more lengthy process, which makes me concerned about closing in time.