do I need an attorney?

Question

hi, i'm a new entry, here.
I'm from Italy, so please forgive my english!
My hubby and I have just won a bid on a house in Estero(FL).we are excited and worried at the same time. An american relative of us is following the whole thing for us and told us about the limited warranty deed. she adviced us to get an attorney.but we can't understand why.
we know the bank is providing us a Title insurance, wouldn't it be enough? what would an attorney do?
I hope someone can reply soon, we are in a hurry, we should wire some money tomorrow. :lol: 
thank you!
michela

Jon Holdman · Answer

That's an excellent reason to have an attorney.

The escrow account is the holding bucket at the title company for all the money.  All the money goes in there, and then the title company cuts everyone the proper checks at the closing.

Michela Bianchelli · Answer

we have an attorney.
the bank seems to be upset because of our choice, i can't understand why they assume we will delay the closing. they say they will be ready for that day, that they want a timely closing and want the signed contract as soon as possible-but the contract is in the attorney's hands and we haven't seen it yet.
we will wire a x dollars deposit on monday ( to the attorney for escrow acct,that I don't know what is :oops: ) and they seem to be in a hurry...
i feel really uncomfortable with thus deal...
bye bye
michela

Jon Holdman · Answer

If you hire your own attorney, they will look over the paperwork and point out any flaws.  They will not provide any title insurance. That will be provided as part of the transaction, and will be from some title insurance company.  That title insurance company (i.e., "title company") will conduct a title search.  They will look through the public records and find any "clouds" against the title.  If they find anything, they will work with the seller to clear up the problem.  Most commonly, its just a matter of the seller paying off whoever they owe money.

If a problem is found later, the title company will deal with it.  That means they will end up paying off the problem.

There are two forms of title insurance.  "Lenders policy" and "owners policy".  The lender's policy covers the lender for a new loan.  Its usually paid for by the buyer.   The owners policy covers the new owner, and is usually paid for by the seller.  However local practice varies, and again, I'm not familiar with processes in FL.

The bottom line is that as long as your transaction is done through a title company, and you have an owners title policy, you have nothing (ok, very little) to worry about in terms of having a clear title to the property.  However, when you get the paperwork for the title policy, do look it over.  There are often a list of exclusions.  These are things they don't cover.  If you don't understand these exclusions, or anything else about the paperwork, an attorney might be worthwhile.  The attorney would be able to explain what the documents mean.

If your REO is typical, the papers will include a statement saying if you delay the closing, you will have to pay $100 for every day its delayed.  It won't say anything about what happens if the seller (the bank) delays the closing.  I can pretty much guarantee they will end delaying it.  They're all overwhelmed with the volume of deals, and it seems like there's always some reason they can't be done on time.

There really are no normal timelines for closing a deal.  It sounds like you're paying cash, so you've eliminated one of the normal sources of delays -- your lender.  So, it will just be a matter of the seller and the title company getting all the paperwork together.

In your case, you would send the money to the title company.  I cannot think of any reason you would send money elsewhere, except perhaps a few hundred dollars to an inspector or someone else who is performing a service directly to you.  Normally the money needs to arrive a few days, maybe a week, before the closing.

Jon Holdman · Answer

Since you're paying cash, you will not need a "lender title policy".  Only an "owners title policy".  They really the same thing.  The difference is who is covered (you the buyer or the lender) and the amount of the coverage.  The lenders policy is usually just for the loan amount, while the owners policy is for the full price you paid.

REOs really aren't much different than any other transaction.  The selling bank will have a ton of paperwork and disclosures that try to get rid of all their responsibilities.  And they will be a pain in the rear to actually get to finish up all their pieces.  But the transaction is no different than any other purchase.

Anna NA · Answer

1)  DON'T FEEL RUSHED.   If your offer was accepted that means that it was good and the sellers should be wiling to wait a few days until you get things in order.

Michela Bianchelli · Answer

yes Jon, I'm sending the money to the title company.
and...closing by mail!!! :goofy: 
I will be in Fl in August, they want to close on the 9th of July.
I'm paying cash so no problems.
I just need to know about the title insurance, I don't know what kind of insurance is, the owner one I think.
my cousin is an agent and she's following everything.but she never followed a REO, that's the reason why she advice us to get an attorney.
anyway, I will let you know.
thank you for your advices and kindness!
michela

Michela Bianchelli · Answer

thank you!
the closing will be done by a title company.
of course, I'm going to read the contract before sending money.
I'm trying to find out how much would an attorney cost and if they are providing me of a title insurance.
I know in normal real estate purchase there are 2 months before closing and just one in REO.if i understand well during this time the title finds out if there's something wrong with the house, right?
so if something is found, the title insurance(that is the same as owner title policy?) will pay.
tell me I've understood, please! :crying:

Jon Holdman · Answer

Michela,
Is the closing being done by a title company or an attorney?  I'm not familiar with the process in Florida, so it could be either.  Normally, you would wire money to the escrow agent.  I'm used to dealing with title companies, so that's the title company.   The person from the title company, the "closer", will give you the wire instructions.  Its usually your lender that does this wire, but if you're paying cash, then it would be you who would do the wire.  If its an attorney who's doing the closing, then money might go to that attorney.

I would not expect you to wire money directly to the selling bank.  The money all goes to the title company and they distribute the money.

Getting an attorney is standard advice for real estate.  Certainly, an attorney can watch out for any gotchas.  However, I've not used an attorney on real estate transactions.  Given that you're a long way away, and aren't familiar (sounds like) with US real estate practice, a lawyer might be worth the money.  The lawyer would look over the transaction and would find any issues.  They could also help you be sure you understand exactly what's happening.

The "limited warranty deed" is common practice for REOs.  The bank doesn't really know anything about the house, so doesn't want to give a "general warranty deed". However, as long as the transaction is being done through an attorney or title company, and you are getting an "owners title policy" on the property, the deed should be fine.  If an issue comes up later, the title company will deal with it at their expense.