Many addenda state that you agree to pay for half the legal fees, should the bank decide to litigate. There is no cap as to what these legal fees may be.
Investors often purchase foreclosed homes, because they are accustomed to the potential pitfalls and weigh the risks.
If you are interested to buy a property whether bank owned or not, there are pitfalls in each home that must be evaluated carefully through home inspection or other inspections deemed necessary. Each property is unique and needs to be inspected. If you have more specific questions, contact us as we are licensed in Maryland.... I look forward to hearing from you.
ALAN A. REZAIE
Once in a while, the bank will give the buyer an incredible incentive to use their title company. The last time it happend to my client the incentive was close to 2k on 160k home - a good chunk of change. What we did was to go with the seller's title co but made sure that one of my attorney's reviewed the paperwork. Mistakes with titlework, of course, were found but corrected before settlement.
Once again, please make sure that your title attorney is diligent and knowledgeable about bank owned homes.
There are plently of positives when buying REOs as well and I can go on for another 3 paragraphs about those :) Best of luck!
#2 - Homes are truly "as-is". Home inspections are always super-important, but even more so with bank properties. Make sure you know what you get.
One more comment. I often see buyers start their search looking for a bank-owned property with the assumption that these are the best deals. I think that's a big mistake. Look at everything that's available in your in your price range and areas of interest. I've helped buyers get their best deals from motivated homeowners who have a lot of equity in their homes. Buyers can miss great deals when they restrict their shopping to bank/distressed properties.