I was wondering if i am buying a foreclosure do i need to do a title search? Or does the bank have to disclose everything? Also if i do need to do one if anyone could recommend a title search company thanks!
DEFINITELY HAVE A TITLE SEARCH DONE!!!
Find a source you trust as well.. I have had 4 deals fall through in the past year where the title company didn't find things during the title search phase... I have a title company that I trust, and sometimes I just have my company run title searches on deals where the seller requires me to use their title company.
Title company response is always. "You are getting title insurance! We are good to close!" The problem with that is that the title insurance is only for purchase price.. So if you buy a property for 15k, and put 50k into rehab, and title issues come back to haunt you the title company is only on the hook for 15k.
I assume you are buying a bank owned property, or are you buying it at sherriff's sale? If you are buying a bank owned property, you will most likely go through a closing at a title company. Up to you if you want to trust that title companies searching capabilities or find a third party on top of the closing companies search..
I have had issues with First American, Chicago Title, and 2 other title companies(underwritten by first american) this year. You probably don't have Chicago title, but first american is nationwide...
Wayne - please tell us the type foreclosure purchase you are considering: from the owner prior to foreclosure auction, from an auction company, trustee or sheriff sale or after property 'reverts' to lender (REO)?
Either way, yes. If at the actual foreclosure auction, you need to know what liens may stay, if some party wasn't named, which mortgagee is foreclosing, back property taxes, etc. If buying a REO pay for your title search And insurance. Many REO's are sold with some version of a Special warranty deed, which guarantees nothing prior to their ownership. Also, they often don't do city/county/utility searches for unrecorded liens, which can be 10's of $1,000's, and they will be exempted (exceptions) in title policy, and not covered.
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