How can I make sure it's a 1st position going to auction?


#1

Some of the properties going to auction are clearly 1st position, when there is only 1 loan. However some are quite confusing. For example:

1st 5/23/08 $536,579
2nd 2/10/09 $515,854 NTS (Auction)

That seems to me that a second is going to auction, am I interpreting it right?

But if it has:

1st 4/13/07 $640,000 NTS (Auction)
2nd 4/13/07 $120,000 ā€”

Is that definitely a 1st going to auction?

Granted I would get a full title report before buying but I still want to be clear how to read this.

Sorry for such a dumb question but Iā€™m new to this. Thank you very much!!


#2

Hi Sarah,
This is certainly not a dumb question. You are smart for doing your research and your due diligence. This will certainly help to insure that you do not make any costly mistakes since buying at auction is a high risk/high reward proposition.
You would want to check for reconveyances and subordinations to determine the lien position. You can access the information through the county recorders office, use your local title company or use online services like propertyinsight.biz. Some investors hire people with title experience to check the title prior to sale to verify the lien position and look for any other title issues like IRS Liens.


#3

Thanks so much Michelle! Very nice of you to answer, and that really helps!