Each state has their own laws that pertain to the process of purchasing trustee sales but the due diligence is pretty much the same for each state. Before you bid on any property, you will want to make sure you are not bidding on a lien in second position. If you purchase a property that was foreclosed in second lien position, then you will be responsible for paying the full balance owed on the first lien. This is not a good situation since the first lien holder could foreclose their lien and you will lose your whole investment into the property. This is very important that you either research public records to make sure the lien being foreclose is in first position or you hire a title company to do a title search.
Also, you will want to make sure their are no government liens or any other liens that would not be wiped out in the case of a trustee sale. The most common government liens are property taxes, IRS liens, maintenance violation liens, etc. If you find a lien on the property, then make sure the owed amount is no more than what you are willing to spend if you purchase the property.
Furthermore, when you purchase a trustee sale property you are purchasing the legal description so its very important that you identify the property based on the legal description instead of the property address or Assessor’s Parcel Number. An address might be incorrect or the trustee might have entered the wrong Assessor’s Parcel Number for the property. If you bid on a property with the wrong address or parcel number, then you have no recourse since you were bidding on the legal description for the property.
If you are not comfortable with researching public records or with reading a legal description, then it is advised that you seek the help from a licensed real estate brokerage company. Beware of companies offering bidding services that are not licensed with the “Arizona Department of Real Estate” since if something should go wrong you will not have any recourse. These non-licensed companies have no fiduciary duty to protect your best interest and might take advantage of you. The Arizona Department of Real Estate has a general fund where you can seek damages and get reimbursed for your losses if you work with a licensed real estate broker.
We are a licensed real estate brokerage company that offers a trustee sale bidding service. Our fees are very reasonable and we can assist you with the due diligence process before you bid on a property. Give us a call TODAY!!