MOFORECLOSURE.COM

Legal Notices

In non-judicial foreclosures, the foreclosing party or trustee must publish notice in a newspaper 20 times, or for four successive issues or weeks, depending on the county. (Mo. Rev. Stat. §§ 443.320) This is important for investors because it provides them notice of the sale date, time, owner name, book and page of the deed to trust being foreclosed, and the legal description. The book, page, owner name, and legal description are needed for performing the title search to confirm the address of the property matches the legal description provided and determine if there are any complications with title or the lien being foreclosed upon. MOforeclosure.com members are provided this data in an easy to manage electronic format.

Viewing the Property

Once you find a property that peaks your interest the next step is to go view it! This involves driving to the home to observe the condition and anticipated repairs. If occupied, some investors talk to the homeowner to get any additional information they can. If you go this route please proceed with caution as not all homeowners are receptive towards the conversation and can be confrontational.

Determining Max Bid

After viewing the property you need to determine your maximum bid at the sale. This includes calculating the expected repairs, holding costs, required profit, and expected sales price. Included in the holding costs should be the taxes and HOA dues, which are not prorated like a typical sales. If you win at the sale you will be responsible for the whole year’s taxes, any prior year taxes, and potentially all past due HOA dues. It is advised that you have your max bid prior to the sale. The bidding process is an emotional and adrenaline inducing experience. Many people, even experienced, investors will want to bid up based on emotion. Therefore having a written max bid helps you keep your emotions and adrenalin in check and your bid within your means.

Perform Title Search

Once you have your max bid, and it’s below the opening bid, the next step is to perform a title search. All counties within the state of Missouri have public computers available at the Recorder of Deeds office where the public can perform their own title search. If you don’t see any, just ask. Sometimes they are behind the desk. Experienced investors know how to perform their own title search and save money. There are many risks with doing it, so do your research and proceed with caution. Many investors don’t want to take this risk and hire a title company to do it for them. Expect around $75-$150 for a title report through a title company. This approach can help reduce title related risks, however title reports can take time to create and can become expensive quickly if attending multiple auctions.

Verify Sale Requirements

One important part throughout this entire process is verifying the sale requirements. This includes making sure the sale has not been canceled, obtaining opening bid, and what funds are required at the sale to bid on the property. Some trustee’s require a cashier check for the full amount at the sale before you can bid. Others don’t require anything and full funds delivered by the end of the day. Members of moforeclosure.com are provided this data in an easy to manage format.

Attend Auction

When attending the auction arrive early. If it’s your first time attending an auction in a county it is recommended that you confirm the exact location of the sale with the trustee. For example, some trustees may hold the sale at the east front door of the courthouse while others may hold the sale at the west. The trustee’s start the sale at the exact advertised time and if you are in the wrong location at the courthouse you will miss the sale. Prior to the bidding the trustee will announce the terms of the sale and verify funds, if required. During the announcement it is important to verify the correct name, book, page, and legal as it should match the title report. Bids are placed by bidders calling out their bids, typically required to be at least $100 increments. Once the bidding is over the trustee will obtain the high bidder’s contact info, legal name they would like to take title, and funds.

Record Deed

After the sale the trustee will send the trustee’s deed through certified mail to the high bidder. The buyer then is responsible for recording the deed at the Recorder of Deeds office. If you are planning on flipping the property it is recommended that you also file a Notice of Intended Sale at the Recorder of Deeds office after recording the deed. It is required to be recorded 90 days prior to the sale if you plan on doing work on the property to avoid any delays or complications with the sale title work.

Secure Property and Start Rehab

Once the deed is recorded you legally own the property. If the property is vacant, the next step is securing the property by swapping out locks and then you can start the rehab. If the property is occupied, you need to make contact with the homeowner and discuss their plans for moving. If needed, you can start the eviction process once you have a copy of the recorded deed.

Mortgage Sales

The majority of all sales in the state of Missouri are on deed of trusts (mortgages). They can be for all types of real estate such as vacant land, commercial properties, houses, and condos. The largest risk associated to buying one of these is you buy a subordinate deed of trust (second lien position) because it doesn’t impact the first deed of trust. The first deed of trust holder can still foreclose and wipe out your interest in the property.

HOA Delinquencies

The recorded declarations for the majority of condominium and subdivision associations include a clause that the association can foreclose on any past due assessments. The majority of these liens are never foreclosed on since they are a secondary liens to mortgages on the property. On occasion they are still foreclosed on with a mortgage. Refer to the Missouri Statute 448.3-116 for additional information on lien priority.

Sheriff Sales

As a result of a court case a judge may order the sale of a property to help satisfy a debt. The county sheriff will then post in the paper a Sheriff sale. The opening bids for a Sheriff sale are often $1; however, the sheriff often will then bid up to the judgement amount. When you buy these they often don’t clear the mortgage or other liens, so you could just be buying a secondary lien without any way of paying off the first mortgage or lien.