I'm buying my first true foreclosure and the bank is offering to pay all the title fees if I use their title company. I already confirmed with the town that the Taxes and Utilities are paid in full and there are no code or building violations. In NJ its customary to close with an attorney but I don't see a need for one since we are not negotiating anything. I do want to make sure there is clean title and the contact states that only title issues discovered prior to closing will be remedied by the seller.
Should I use my own title company at my expence or is title insurance the same through anyone?
Can't speak to NJ but I Always recommend using your own title co. Your title co. will do a better search for unrecorded issues. Also, while they may pay for the actual title policy, their other fees are usually higher and it's almost a wash anyway. Be sure to carefully read the B section exemptions in your title commitment.
Usually a foreclosure cleans up title pretty well. There are only about 3 big title insurance underwriters that most title companies use. You will see which one the seller's title company is using on the preliminary report.
Unless I suspect weird issues like easement problems, I usually advise clients to save their money and go with the bank's recommended agency.
Of course, New Jersey may be different than Utah. But after the closing costs on the loan, title insurance is the next biggest ticket item at the settlement table and it's almost never cheaper for the buyer to pay that to save elsewhere.
@Adam Anderson I would recommend you pay the searching fee with a company you trust which around our market costs about $250. You'll have the peace of mind knowing a 2nd set of eyes has searched for any issues much like you'd pay an inspector for peace of mind of the history of the building even though they don't actually fix any of those problems. Then you can also ask to pay for the ALTA Homeowners policy to get extra coverage as well above what the seller will pay for. Talk with the Insurance company you trust for the best advice in your local market. All the best.
Under contract on a foreclosed property right now in NJ. Same typical decision for me - I would not have to pay for title work if I used banks title co. Would have been a big mistake going that route - they were calling to close without clearing all of the judgements on the property. I'm my case the due diligence of the banks title company was clearly lacking. I highly recommend getting your own title co in these circumstances. Certainly worth it for me.
I would allege Conflict of Interest and demand a clear statement of independent Entity, board of directors and management before I would accept the in-house title company
Thanks for all your input on this! I might have my title person run the search for me so I know its clean but use their agent for the insurance and closing. Anyone see an issue with that approach?
I would highly recommend getting your own title company to work on your behalf. If you would like a recommendation of one, please let me know and I can refer one to you.
I bought a foreclosure in TN recently. I used the bank's title company. I agree with your approach.