Here are a listing of Frequently Asked Questions about SB1079 And it’s process:
Q: What are your SB 1079 rights?
A: If you are a prospective eligible owner-occupant, you may be able to purchase the property if you exceed the last and highest bid placed at the trustee auction. Your bid must be higher than that placed by any competing eligible bidders. If your bid is the highest bid, then the home is yours unless an eligible tenant buyer also asserted their right.
Q: How much time do you have to exercise your SB 1079 rights?
A: You have no more than 15 days after the trustee’s sale to send a written notice of intent to place bid. You have no more than 45 days after the trustee’s sale to send the cashier’s check and affidavit.
Q: What happens after you place a bid?
A: As of 5 p.m. on the 45th day after the trustee’s sale (or the following business day if it is a weekend or holiday), if one or more eligible bidders have submitted a bid, the eligible bidder that submitted the highest bid shall be deemed the last and highest bidder and a Trustee’s Deed upon Sale will be issued in the highest bidder’s name. It will usually arrive in about a week after the 45 day deadline.
Q. What happens after I win the auction
A. Once you are the last and highest bidder, the Trustee will issue a Trustee’s Deed Upon Sale (TDUS) to you. To make it official, you should immediately take the deed down to the county recorders office and have it recorded. Note, you will have to pay the transfer tax at that time.
Q. How do I get the former owner out of the property
A. Sometimes the property is already vacant which is the best case scenario. Normally it’s not. The former owner(s) lost their rights to stay in the property once the property originally sold at auction (45 days before you became the owner). The best way is to negotiate a peaceful surrender (we can help) in a “cash for keys” agreement. They relinquish the property at a given time (e.g. 30 days) in exchange for a cash payment. If they are uncooperative, then you have to file an unlawful detainer case against them.
Q. How does an unlawful detainer work
A. An unlawful detainer is a court case that will remove anyone in the property who is not entitled to be there. You can expect it to take at least 2 months to remove parties in the house. It is usually preferable to negotiate a peaceful surrender in a “cash for keys” agreement.
Q. How do I know if the Title is Clear
A. Information regarding title can be found at the county recorders office. We provide property profile reports from a reputable title company that outlines the transaction history of the property. To be completely sure, it may take a trip down to the county recorder’s office to perform searches (we can help with that).
Q. What are the risks?
A. The biggest risk is the foreclosing loan position. Before parting with any funds, one must make sure that the loan position is in 1st position (unless you are a savvy investor). That way, all lower position loans and liens are wiped out by the foreclosure.
Q. What if there is a tenant in the property
A. If there are tenants on a lease, you must honor the lease until it terminates. If the tenants are month to month, they require a 90 days notice to move out. You may be responsible for their deposit as well as any state/county/city mandated relocation fees.
Q. Can I look inside the property before placing my bid?
A. You are not allowed to trespass on property. Don’t do it. Access to the interior can be done by consent only. Some folks are cooperative, others are not. The only way is by knocking on the door and asking permission.
Q. Can I get title insurance for the property
A. In any situation where this is a tricky title situation, we would recommend that you get an abstract of title (sometimes called a guarantee of title). This will show you all matters affecting title that may be of concern. Title companies will charge for this service.
Q. Can I finance the purchase?
A. Not right away. The property must be paid for with a cashier’s check from a reputable bank up front. Once you have secured title to the property, there are options for financing. Rates, amounts, etc. are are dependent on what products lenders have available.
Q. What happens after I win the auction
A. Once you win the auction, you are sent the “Trustees Deed Upon Sale” (TDUS) usually in about a week’s time. Most of the Trustee’s will allow you to send them a FedEx label for an expedited return. Once you have the TDUS, to perfect the transfer, you must record the document down at the county recorders office. At that time, they will ask you to pay a small fee and the county transfer tax of $0.55 per each $500 of the transfer price. E.g. A house for $100,000 will cost $110 in transfer tax.
Q. If I send in a Notice of Intent, do I have to bid?
A. No. There is no obligation after you have submitted a notice of intent
Q. How do I know how much the property is worth?
A. With each spreadsheet with distribute, we have several different estimated market values using different techniques. They are fairly accurate for a house that is in marketable condition. However, you need to assess how marketing the house is and how much resource will be required to bring it to marketable condition. Before you bid, we will conduct a manual Comparative Market Analysis on the property to make sure the automated numbers are accurate.
Q. Do I still have to pay delinquent property taxes?
A. Yes. Property taxes run with the land. So whomever owns the property must pay property taxes including any penalties.
Q. Do I still have to pay HOA dues that are delinquent?
A. It depends on the HOA CC&Rs in effect. In most cases we have encountered, the new owner is only liable for time dues since the ownership changed hands (unless it is an HOA foreclosure). That timing starts from the date of the original auction (45 days before you won the post bid process.