Kansas City Auction Home Title Insurance

9 Replies

Hello my fellow investors, I wanted to see if anybody knew of a title company that provides title insurance on auction homes (mortgage foreclosures at the county courthouse). I am having some difficulty finding a company that does so. I have contacted a few (Accurate, Platinum, Alliance), but haven't had any luck. If anybody knows of anybody out there that could so do it'll be greatly appreciated. Thanks in advance!

Are you looking for title insurance or a title search?  I think you will be very challenged to find title insurance on a property that didnt have a warranty deed sale.  I have bought over 100 at the Kansas City sales over the last several years.  We obtain a title report and when we finance the property later, we obtain a title insurance policy as mandated by the lender. 

@William Robison : well I was under the assumption to ALWAYS get title insurance? But in your case either way, how do you get title insurance when you refinance or how can you provide a warranty deed if you sell if the property currently doesnt have a guarenteed title? In the situations of your auction homes, at what point during the auction purchase do you do the title search? Before you bid or after? And what do you do if title search comes back and you see backtaxes or liens,etc? And if you do win the auction, but the house has liens, do you just hold it, or what would you do? Sorry if I seem clueless, but on our last auction home it was done online, so we were able to get title insurance and a special warranty deed. Thanks a ton for your knowledge.

Originally posted by @William Robison :

Are you looking for title insurance or a title search?  I think you will be very challenged to find title insurance on a property that didnt have a warranty deed sale.  I have bought over 100 at the Kansas City sales over the last several years.  We obtain a title report and when we finance the property later, we obtain a title insurance policy as mandated by the lender. 

@William Robison : well I was under the assumption to ALWAYS get title insurance? But in your case either way, how do you get title insurance when you refinance or how can you provide a warranty deed if you sell if the property currently doesnt have a guarenteed title? In the situations of your auction homes, at what point during the auction purchase do you do the title search? Before you bid or after? And what do you do if title search comes back and you see backtaxes or liens,etc? And if you do win the auction, but the house has liens, do you just hold it, or what would you do? Sorry if I seem clueless, but on our last auction home it was done online, so we were able to get title insurance and a special warranty deed. Thanks a ton for your knowledge.

 

A title can be guaranteed.  Just because it transfers without a warranty deed, doesnt mean that it is a doomed asset for life.  It just needs to have a search done and transaction placed to transfer the type of deed.  Buy it in one entity, then transfer it to yourself in another entity with title insurance and a different deed type.  Auctions sell with a trustee deed, which means there is no history tracked, resolved, etc.  Its up to your due diligence to perform a search prior to purchasing to make sure that it is a clean title or can be cleaned, then a new deed can be placed.  However, we keep them in trustee deed state, because the refinance requires title insurance for the lender, and therefore a policy is put into place.

Taxes and certain liens will carry with the title at auction sale.  I know these in advance of bidding, then calculate those costs into my bidding.  I clear them after we purchase. 2nds, and some other liens can be wiped away with a auction sale with trustee.

Originally posted by @William Robison :

Taxes and certain liens will carry with the title at auction sale.  I know these in advance of bidding, then calculate those costs into my bidding.  I clear them after we purchase. 2nds, and some other liens can be wiped away with a auction sale with trustee.

Is it okay I I can give you a call to go over a little how you do it? You are by far the biggest help I’ve found in regards to this topic. 

 

Originally posted by @Johny Omaga :

@William Robison : well I was under the assumption to ALWAYS get title insurance? But in your case either way, how do you get title insurance when you refinance or how can you provide a warranty deed if you sell if the property currently doesnt have a guarenteed title? In the situations of your auction homes, at what point during the auction purchase do you do the title search? Before you bid or after? And what do you do if title search comes back and you see backtaxes or liens,etc? And if you do win the auction, but the house has liens, do you just hold it, or what would you do? Sorry if I seem clueless, but on our last auction home it was done online, so we were able to get title insurance and a special warranty deed. Thanks a ton for your knowledge.

Those are the risks of buying at auction. You take on all the risk of title ad liens.

 

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