PropertyRadar Community

Steps after win at auction?

Not clear about the last steps after a foreclosure auction purchase. Are these the correct steps and please see my questions?
After auction steps?

  1. Provide cashiers check(s) for amount of winning bid
  2. Is there a receipt you will receive? What documents will you walk away with from auction?
  3. Attain homeowner’s insurance
  4. Receive Trustee’s deed in the mail?
  5. New owner records deed at County Recorder’s office
    Are there any other steps? I’m trying to understand the full picture of this process. Thanks!

You will get a receipt - essentially a copy of the document that the auctioneer fills out with the winning bid, funds received, your contact information and vesting.
Your outline above is pretty good. If the property is vacant you should take possession of the property immediately after the sale - do not wait for the deed to be recorded. If the property is occupied and you got a good deal, sit tight and don’t start the eviction or cash-4-keys negotiation until after the deed is recorded.
If you don’t receive the trustees deed within 10 days call the trustee and find out when it will be sent. It is best to make sure the trustees deed is recorded within 15 days after the sale as it perfects title as of 8am the day of the sale (see Civil Code 2924h©)

How does the trustee’s deed get recorded in the winning bidder’s name? Does the trustee take a step to record deed in winner’s bidder’s name? Or is there a step the winning bidder must take to record the trustee’s deed with the county? Thanks for any insights or clarifications!

After you win the auctioneer will take your money, and fill out a form with your contact information and how you want the property to vest. They will give you a copy of the form as your receipt. The trustee will then mail you a trustees deed to record - which you should do within 15 days of the sale (doing so makes the recording of the deed effective the day of the sale protecting your interest in the property - see CA Civil Code 2924). ? On rare occaission the auctioneer will collect the recording fees from you, and the trustee will record the deed on your behalf. This is the trustees decision not yours.

How much are the recording fees, generally?

$1.10 per thousand.

“If the property is occupied and you got a good deal, sit tight and don’t start the eviction or cash-4-keys negotiation until after the deed is recorded.”
I’ve heard you say this before, and my question is why wait.? Are there things the owner could do in between that are more likely to cause problems?

It is easy for a really aggressive owner to get a sale overturned prior to the deed being mailed as all the trustee has to do is return your check. Has happened to me before. Much harder for them to rescind, though not impossible, after you get, and record, the trustees deed. So wait.

This is a follow up question to the original question posted in this thread. Once I received the Trustee’s Deed and recorded it at the County’s Recorder Office, is there anything else I need to do? How do I know that the 2nd loan (the Jr. lien) has been wiped out? Do I get some sort of letter in the mail to notify me? How or when do I know that the title if clean and I own it 100%?

You will not receive anything beyond the trustees deed. One could argue that you actually never know on any property (foreclosure or not) that you own it 100%. That is the reason for title insurance - just in case someone claims ownership or a lien. To increase your peace of mind you could have a local title company do a preliminary title report for you.

Thank you Sean for the quick response. How much does a preliminary title report cost? How about Title Insurance?

Figure $350 for a prelim by a title co. Title insurance depends on value - but most title companies won’t write an owners policy after you purchase at auction (though some have). Check with your local title co.

Sean, do you know a resource in Cook County, Illinois that would confirm the same advice about changing the locks on a vacant property?

Any good eviction attorney or service should know the answer.

Sean, Is it really prudent to take possession of a property before you have the Trustee’s Deed? Without a deed you don’t own the property, and rekeying a property you don’t own is trespass, no? Also, what if the sale is rescinded?

As long as the trustees deed is recorded within 15 days you were the legal owner as of 8am the day of sale. That said, you are correct that there is a risk that the sale will be rescinded. Still if the property is vacant, I’d personally rather take the risk and secure the property, then risk someone moving in while I was waiting for a deed that I’ll get 95% of the time. One of the key parts of being an auction investor is determining the level of risk you are comfortable with. But note that there are always trade offs and there is no way to make this business risk free.

Sean, I bought house at trustee’s sale. After I recorded my trustee’s deed,I when to my house and talked to the tenant who is previous owner’s friend and give him 30 days to move out, so it should be by 04-26-10. But he said he will call me back last week,and he never did,and he never returned my phone call.Should I start eviction process right now? But I don’t know the tenant’s full name. Should I evict the tenant and the previous owner both or just the tenant? Should I just serve the eviction notice to the house I just bought ? Thanks Sean for all the answers, it is very helpful.

I always start the eviction process immediately regardless of any cash-4-keys deals or other agreements - though I make it clear to the folks I’m doing this. Why? Its an insurance policy to make sure I don’t lose a bunch of time if they don’t follow through on their part of the deal. If I’m going to give someone more than a couple of weeks to get out, I have them agree to a stipulated judgment on the eviction such that I can move straight to filing the judgement and calling the sheriff if they don’t perform.

what do you mean by agreeing to a stipulated judgment on the eviction ? Secondly, wha abot Jenny’s question on not knowing who the tenant is, how do you start an eviction in such a case?

An unlawful detainer case will end with a judgement - a stipulated judgement is one that is pre-agreed to by the parties. If you do not know who the tenant it is you should start by trying to contact them. If you can’t identify them your eviction service can help you with including “all unknown occupants”.