Ok, im so tired of scouring the internet reading articles and so much conflicting or off in the weeds information.
Im looking at alot of foreclosures and REOs, i know you must perform a title search for leins and encumbrances. So.. ive called title companies about this and the fee is usually around 300 per house! Obviously thats not feasible when looking at dozens of houses a week. So what do you do!?
Also it seems to be a common misconception that REOs will be free and clear titles, but ive read that seems to not always be true. Clarification?
Realtor · Houston, TX · Member since 2015 · 27 posts · 4 votes
6y
@Chris Mcmahan
It’s very true that there are always some kind of surprise with REOs and their titles having some type of clouding, whether a lien, active code violation accumulating fines, or some other type of encumbrance that needs to be cleared. The banks sometimes take care this prior to closing but generally speaking they would prefer to pass this on to a buyer- anything that the bank can avoid spending on. Their goal is as much profit as possible.
Now with getting title searches done- find a title company that will give you a bulk pricing option so you can do title searches on multiple homes.
Well, is your market that good you have that many prospects you want to do a preliminary title search? To be upfront, I'm not an expert on foreclosures and auctions. I've thought and tried to do it, but both don't like the risk and haven't really found a good deal. The title search is the last thing I would have done before going to an auction. But, maybe its just my methodology of just finding a one or two good, solid deals.
Well, is your market that good you have that many prospects you want to do a preliminary title search? To be upfront, I'm not an expert on foreclosures and auctions. I've thought and tried to do it, but both don't like the risk and haven't really found a good deal. The title search is the last thing I would have done before going to an auction. But, maybe its just my methodology of just finding a one or two good, solid deals.
Absolutely, and thats exactly my hang up. Auctions are twice a week with usually about 15 houses each day going in, after i analyze the deals i usually have 5 per day im planning to bid on, so thats 10 a week, or 2500 a week at 250 title search per house! And then the kicker is last minute most auctions are cancelled or postponed and theres usually only 1 or 2 i may be able to bid on, so its obviously not worth title searching so many when its unlikely youll even be ablentonbid on it
Well, is your market that good you have that many prospects you want to do a preliminary title search? To be upfront, I'm not an expert on foreclosures and auctions. I've thought and tried to do it, but both don't like the risk and haven't really found a good deal. The title search is the last thing I would have done before going to an auction. But, maybe its just my methodology of just finding a one or two good, solid deals.
Absolutely, and thats exactly my hang up. Auctions are twice a week with usually about 15 houses each day going in, after i analyze the deals i usually have 5 per day im planning to bid on, so thats 10 a week, or 2500 a week at 250 title search per house! And then the kicker is last minute most auctions are cancelled or postponed and theres usually only 1 or 2 i may be able to bid on, so its obviously not worth title searching so many when its unlikely youll even be ablentonbid on it
It’s very true that there are always some kind of surprise with REOs and their titles having some type of clouding, whether a lien, active code violation accumulating fines, or some other type of encumbrance that needs to be cleared. The banks sometimes take care this prior to closing but generally speaking they would prefer to pass this on to a buyer- anything that the bank can avoid spending on. Their goal is as much profit as possible.
Now with getting title searches done- find a title company that will give you a bulk pricing option so you can do title searches on multiple homes.
I see... If you don't mind me asking you (yeah, kinda odd to answer your question with a question): What is the period of time that you have to get your whole deposit in? I thought it varies between States/localities and Sheriff sales are different from online auctions. I tried once and it took a couple of weeks for a recommended Title company to do a search on a property I was interested in. Basically, maybe you can find one that does it quickly, then between the time you win the auction and have to put in the funds to secure it, can you get the Title search done. That much I've heard where the winning bidder doesn't get their earnest funds in time, so they go to the next bidder. I know other investors who have said that they get a call sometimes as much as 2 weeks later from the auction house because the winning bidder backed out. I'm a little fuzzy on what happens to the initial funds you give to the auction house (at a Sheriff's sale).
Sorry, I don't have an expert opinion, and I hope this helps.
Ya i think they can differ between judicial and nonjudicial sales.. but the ones i go to in vegas are hosted by auction.com, and you have to pay directly after the auction the entire amount.
And i believe you can get a tirle search done in as little as a day or two if they know its a rush. But you definitely have to do that before you win the auction.
Real Estate Broker · Atlantic Beach, FL · Member since 2016 · 5 posts · 0 votes
6y
Chris, I wish I had someone with this problem in my city. We have a lot of foreclosures, too, but investors usually have someone to help them with this. A title attorney here can easily pull those titles for you ahead of time. Are you really buying that many at one time? You should be able to hire someone. I would love to have this kind of problem!
Chris, I wish I had someone with this problem in my city. We have a lot of foreclosures, too, but investors usually have someone to help them with this. A title attorney here can easily pull those titles for you ahead of time. Are you really buying that many at one time? You should be able to hire someone. I would love to have this kind of problem!
No, just looking at a lot, its hard to even wind up buying a single one, theres so many bigtime investors that the price gets driven up way too high for me to compete, but i still have to analyze the properties before the auction.
@Chris Mcmahan how do you find REO's list? Or get them from a bank?
countless hours online, you can visit all of the national and local banks websites... seems about half have REOs actually listed. also sites like auction.com, and hubzu. Then of course theres HUD homes and many others. Theres better ways, but they cost money.