How do you protect title when buying at auction trustee sale?


#1

Sean, I’ve read through this forum but I am still confused about title issue. If you buy at auction, how do you get title insurance afterwards? and at one point, you stated the deed needs to be recorded within 15 days, in order to protect title ---- can you clarify? Also, if I am planning to buy 1 property through auction just for a long-term rental, if I can’t get title insurance after the sale – will it matter, as long as I get my own renters on the property. Will it be harder to sale say in 5 years because of this?

I know you have suggested running a prelim title search prior to bidding, but that gets very expensive if the property that you have researched on has a high opening bid or some other party wins . I don’t mind doing the research at the county but does that mean if I don’t run a prelim title search before I win the property at the trustee sale, I can’t get title insurance?


#2

Lots of questions.

Recording the deed within 15 days makes it effective the morning of the sale, providing you protection from things that happen between the sale and the recording of the deed - nothing more.

Nothing says you have to get title insurance. When you go to resell the buyer will likely require it, and there should be no problem in getting it, unless there were outstanding title issues when you purchased it (for example you bought a 2nd and the 1st was still outstanding).

I used to look at about 50 properties for every 1 I’d buy, so I definitely get that the cost of ordering prelims is very expensive. The question really just comes down to how much risk you are willing to take.