Title company required for buyer on REO flip?

Question

I just had my offer accepted on an REO. In the addendums, there is a contract cover form that outlines several areas of interest. One area is about 'Buyer's attorney or title company.'

Do I as the 'A' buyer have to get title services for my part of the A to B transaction? I didn't think I had to.

Bill Gulley · Answer

Hi, since the bank has already done a title search, they simply have an update to settlement. Title insurance is acquired by the buyer since they have the right to purchase the policy from a company of their choice. Settlement fees are suaully split. If you select another company for your title policy you will need to pay for the search for the committment and the insurance premium whereas, going with the seller's search, you only have the premium costs. Ted makes an very good point here as you may have to obtain another search, unless you can find another insured closing agent with that title insurer, in that case, you can save a few bucks. Bill

Ted Akers · Answer

If you are doing an A-B / B-C deal some title companies, which the selling bank is going to select, will not want to close both transactions. In that case you want to have an investor friendly title company ready to close the second transaction for you.

Steve Babiak · Answer

The REO I just closed on was one where the bank refused to pay for title, so I used my title company. Good thing that I did, because there were quite a few delinquent bills that would have been stuck to me had they not been uncovered by my title company and placed on the HUD1. That caused quite a delay in getting the bank to sign off on the HUD1.

Jon Holdman · Answer

Typically on a REO purchase the selling bank will specify the title company. Usually you're allowed to choose any one you want, though. Their trick is that they will only pay for the title insurance if you use the title company they choose.

Title company required for buyer on REO flip?

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