I am working with a client on a 25-lot REO purchase that has been extended four times (original closing date was March, 2012) and were still awaiting title to clear. The buyer is patient and willing to wait to have clear title to the properties, especially given the attractive purchase price at auction.
The Title company works bi-laterally for the Buyer and the Seller.
Go in to the Title Company and ask for your Escrow Officer and ask her (probably a her) what the problem is and how long it take to clear it.
Good luck and may God bless
I hope this helps. Spread the word!! We need to fight back!!
lic NJ home inspector since 1993
While you are still in-contract, ask your agent to provide you with a copy of the title report. Your agent should review the title report with you. Your agent should also discuss the title issues with the listing agent. Your agent can also contact the title company that prepared the title report if there are questions.
If you agree to cancel the sale, then you have no contract and nothing that entitles you to any preferential treatment when the title issue is resolved and the property is put up for sale. With rising property values, and more buyers in the market, there's a good chance the property you have under contract will sell for a higher price in the future. Why not offer to extend the closing date to allow for the title issues to be resolved? That seems like a better solution in your position.
Both of the previous responses are good. I second Kary's suggestion for the "homeowners" policy, even if you are requested to pay the difference. If you were planning on financing the home, your loan could not be approved without all Title issues being cleared, otherwise you could be responsible for liens from previous contractors, HOA's or other creditors. It is clearly in your interest to get these resolved before you move forward.
I suggest you keep one eye on this property and the other considering other options on the market. If the issue resolves quickly, you will be back on track, if not; you could miss out on some good opportunities.
Get a copy of the title to determined the problems severity and how long it will take to clear.
Rember don't buy anything without clear title or you are taking on a legal expense down the road.
They most likely pulled the property because they felt it would be a longer period to repair the clouded title.
Eventually the title will get cleared, but is it worth the wait? Only you know.
On REOs I recommend paying the extra premium to get the "homeowner's" level of title insurance. That would be especially prudent where here there are already issues.