ask george & chuck
Feb. 4, 2008

Buying foreclosed property ...
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: I'm interested in a house that is supposed to go into foreclosure soon and has been put up for quick sale. I made an offer that was turned down. Through a title search, I found that in 1995 the amount owed was $90,000. However, the seller's REALTOR® says the offer needs to be around $160,000. What's my next step in following this house to foreclosure?

Answer: You should employ a REALTOR® or attorney to represent your interests in this transaction. It doesn't matter what the owner owed in 1995. You need to find a price and terms that are acceptable to you and the seller today. Also, there may be some title issues that you don't know about. A licensed real estate professional should be able to identify these for you.

Dear George: When purchasing a property at a foreclosure sale, which liens and encumbrances are wiped out by the sale?

Answer: Texas follows the rule of "foreclose down and redeem up." The foreclosure sale wipes out all liens filed after the foreclosing lien was filed. However, one forecloses subject to the liens that were filed prior to the foreclosing lien. There are special rules that relate to IRS liens, ad valorem tax liens, and a few other government liens.