Excruciating...frustrating...nails-on-chalkboard...

That may very well describe every realtors job these days. If a realtor is not experiencing these emotions, I claim they are not really working!

I always like to say that I will take real-life situations and store them away as a teaching "moment". I had one occur recently that has thrown me (and my clients) for a loop and really caused some heartache.

Long story short, Buyer contracted to purchase a beautiful pond-front home that has recently been remodeled. Seller got it at foreclosure, did some very nice things, and put it on the market. All well and good...

...that is, until today. I get a call from the title company closing the deal who proceeds to inform me/wreck my day that the home has an OPEN mortgage on it. Huh? Apparently, only 1 mortgage was foreclosed on and the other mortgage remained open and in force. Ugh.

The delicious topping on this was that the mortgage that was foreclosed on was riddled with errors relating to the legal property description...those, too, must be corrected.

This is an excellent illustration of CAVEAT EMPTOR, or Buyer Beware. Some people believe that when a property is purchased at county auction due to foreclosure, the property is free and clear. It's not. IRS liens MAY stay with a property until satisfied or negotiated. If the 2nd mortgage is foreclosed on and a buyer outbids the 2nd, then the Buyer takes title SUBJECT TO the 1st mortgage. Utility liens normally stay on past foreclosure.

One MUST due a quick and dirty title search, at the very least, before purchasing a property at auction. That is the only way to know the true picture. This is not true, however, if the property is bank-owned. Normally the proper channels have been followed and title is clear of defects.

Will let you know how this turns out...