I notice that some properties show an “unknown” winning bid, is there a secret to hide your winning bid amount or name so anyone you sell to can’t research that information? Also, even when I check the property records after the recording sometimes the property is flipped to another entity for a nominal amount. Can you always assume that nominal amount is $0 or is there a certain limit it has to stay under to be considered nominal?
I’ll let Michelle speak to the “unknown” winning bid amt (assuming you're asking about how this might reflect on foreclosure tracking websites such as FR?). I will sasy that "unknown" is the exception ... in vast majority of cases, the winning bid amt is reflected on FR website… often within minutes/hours of the actual steps sale.
Re “hiding your name” … the buyer’s (or entity’s) name is a matter of public record. A few weeks following a property sale, you can go down to the county recorder’s office and check the Grant Deed … or Trustees Deed Upon Sale (in the case of a foreclosure sale) and you’ll see who bought the property. Now that does not mean that investors can’t set up special entities such as limited liability companies (LLCs) to hold their real estate. Many in fact do set up entities such as trusts, LLCs, to hold their property … These entities are ostensibly set up for legal and tax purposes, but they can also serve the secondary purpose of making it less transparent to the public “who” bought/owns the property.
Re transferring property for a “nominal” amount… Not sure what you’re referring to? Language in some interspousal grant deed transfers (or into and out of a trust) is vague … “for valuable consideration” etc. so maybe this is what you mean by “nominal?” There are serious legal/tax implications for transferring property for “less than fair market value.” There are special tax rules/exceptions (where it’s not really a sale) for interspousal transfers and other “less than arms length” transfers (gifts, trusts, etc), but my already muddled reply would quickly become even more unwieldy by continuing down this path … so I’ll quit and admit that I’m out of my league on this topic.
There are occasions when the winning bid is not available from the trustee. The research team at ForeclosureRadar actually picks up the phone to manually call on these to see if the winning bid can be obtained in some way. In cases where we are unable to get the winning bid we are forced to enter unknown. Once the trustees deed is recorded you will usually see the transfer amount. There is a tactic used by many commercial agents to hide the transfer value by entering that on the back of the vesting deed. Since the recorders office only films one side of the document then the transfer value is not available. We are seeing some of the auction investors starting to use this tactic also.
Thanks Danny B and Michelle. I remember reading about that back of the vesting deed tactic before, since I don’t buy just by myself I will have to see if that is an option on my next deal. I see that as a potential benefit in dealing with buyers and their agents because they see the number and sometimes may think a huge profit is being made, which is a pretty easy mistake to make, but it’s hard for them to remember you had expenses like cash for keys/eviction, repairs, hard money loan costs, etc.
WIth the “nominal” amount question, what I see is one Corp or LLC selling to another LLC or corp, but even though it shows the transfer in title, it is not reported as an actual sale, so I’m thinking most likely it is the same owner, just transferring to a different entity/company they own. What I’m curious about is when it shows a transfer for a “nominal” amount, whether I can assume that is $0 which seems likely or if there is a certain limit you can get away and have the transfer still show as nominal.
Hi Alan, There can be a variety of reasons why a deed would be recorded. It could be a transfer between partners, vesting change, transfer to trust, LLC etc. The recorders office is looking for transfer tax so they would have to meet the criteria based on the Preliminary Change of Ownership form. If there is any percentage of ownership change and it is not a transfer between family members then the county would collect the transfer tax. There is not a tolerance or a limit that I am aware of.
Hi Michelle,
Thanks so much for your reply. It’s good information for those few ones that were a little more difficult to determine the purchase price.
Don’t forget that the tsfr. tax pd. usually shows up - and you can easily figure, by the tax pd., what the purchase price is.
There is a method of hiding all this info. My son has done it in Fresno. I don’t recall the procedure - but he said the method is in the Code.
IN ORDER TO hide $ of the purchase, there is a special document called " NON PUBLIC RECORD" need to be recorded same time. It is free and just an extra form to be recorded along with the TDUS. I always help my clients record with the NPR because it always helps to not disclose the purchase amount.
Simon Wu
simonwu01@gmail.com
626 589 8822
PS However, normally after 2-3 months, the realist(MLS site of the real estate agent)still pick up the purchase amount from the trustee itself…
oops… forgot one thing… NPR, NOT PUBLIC RECORD will remove the purchase amount, the original debt amount and the transfer tax amount… SO for a short time, it would be hard to find out the purchaes amount from the regular means of search. thank you.
This is for Miketh. Thank you.
BY THE WAY, I recorded NPR for LA county, SB Cuonty, ORagne COunty, San Diego County so far. Not very sure about northern california…Thank you.
Hey Simon, Thanks so much for the info.