I'm buying a bank owned property, do I still need to buy Title Insurance?

Asked by Patricia Cole, Discovery Bay, CA Sat Mar 3, 2012

If a property is "Bank Owned" doesn't the bank have to sell the property with clear title?

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17
Michael Emery, , Minneapolis, MN
Sat Mar 3, 2012
The bank will issue a special warranty title which only guarantees the period of time that they owned the property. If it's discovered that there were title issues prior to their owning the property, or if liens were attached to the property after closing but before the deed is recorded, you would be personally liable for those liens. Title insurance that has 'gap coverage' will cover you if title issues crop up after closing.

Personally, I think that title insurance is MORE needed when you buy a bank owned homes because sometimes those titles are a mess.
3 votes
William McCa…, Agent, Mullica Hill, NJ
Wed Feb 27, 2013
Definately. If you obtain financing the lender will require it. Make sure you get a Owners title policy for yourself. Most people do not realize that the title search and insurance is for the benefit of the lender not the borrower. If they want it for their protection why wouldn't you?
0 votes
Castellucci…, Agent, Sewell, NJ
Sat Feb 16, 2013
I know the question is from 2012...but every buyer should get not only title Insurance, but a home inspection, termite inspection, other environmental inspections such as mold radon, etc...and more...even if purchasing a brand new home... feel free to contact me for my free email version of "enviromental issues" .....
0 votes
John Kelly, Agent, Mantua, NJ
Sun May 27, 2012
Yes you should get Title insurance. This is one of the largest purchases we make and just like home, health , auto, etc... you want to protect your self.
0 votes
Mike Sullivan, Agent, Gainesville, FL
Mon Mar 5, 2012
Patricia...I'm sure you get the drift here....you don't want to purchase a property which has liens against it....title insurance will insure you have a property with no outstanding encumbrances which could be a MAJOR problem later. Lenders will also require it. In most instances, the bank (seller) will pay for the owners policy, which is the bulk of the cost
0 votes
Gary Geer, Agent, Antioch, IL
Mon Mar 5, 2012
Patricia,
Yes. You need title insurance. The cost is small as compaired to the risk of potential issues. Never buy a home without it.
0 votes
Robert Barnh…, Agent, Mantua, NJ
Mon Mar 5, 2012
Title insurance is a necessity. ESPECIALLY, when buying a bank owned property. The bank is only looking to make sure that their lien is satisfied, however, there could be unpaid property taxes, municipal utilities and/or secondary loans against the property. The only way to be certain that you're not inheriting other liens against the property is to do a title search and have that search insured by a reputable title company. If you need any help with this matter please feel free to reach out to me! Good luck!
0 votes
What if you're buying the foreclosure (bank owned) from an online auction site?
Flag Sun Oct 30, 2016
But what if you are buying the back owned property from an online auction site?
When should you get the title insurance?
Flag Sun Oct 30, 2016
Marsha Bowen…, Agent, Livingston, NJ
Sun Mar 4, 2012
Hi Patricia,

If you purchase a bank owned property, consider the purchase of Title insurance as money well spent. Title issues have become a concern as a result some foreclosures resulting from the mortgage meltdown.

Best of luck to you!
0 votes
Ryan Moran, Agent, Naperville, IL
Sun Mar 4, 2012
Title insurance is definitely needed for bank owned properties. The previous owner was obviously in financial distress and you have no idea what other debts weren't paid that have resulted in liens on the property.
0 votes
Laura Gianno…, Agent, Manahawkin, NJ
Sun Mar 4, 2012
Having been involved with REO sales, I can say from experience that the title is rarely clear.
0 votes
Roseanne Raf…, Agent, Marlton, NJ
Sun Mar 4, 2012
Yes, you still would need title insurance to be protected against any claims that could arise against the property that for any reason may be undetected at this time. Additionally, your lender will require it, if you are getting a mortgage.
0 votes
Gina Chirico, Agent, Fairfield, NJ
Sat Mar 3, 2012
Patricia,

As others have stated, YES you most certainly need title insurance. Never trust the bank nor any other owner that the title is clear. You need proof that its clear, assurance and to protect yourself.
0 votes
Lyle Wolf, Agent, Morristown, NJ
Sat Mar 3, 2012
Absolutely, you need title insurance to protect your purchase. You cannot trust title on a bank owned property. Do not buy any title insurance offered by the bank you are buying the property from as it may not provide complete coverage.
0 votes
Alain Picard, Agent, Puyallup, WA
Sat Mar 3, 2012
If you are obtaining a loan to buy the property then the properties title will need to be clear when transferred to you.
0 votes
., , Tranquil Place, Carefree, AZ
Sat Mar 3, 2012
It is imperative that you get title insurance. It protects you and your mortgage company will insist on it.
Web Reference:  http://www.GylesHomes.com
0 votes
Wayne Odenbr…, Agent, Mountain Lakes, NJ
Sat Mar 3, 2012
Of course. It will; insire thaty ou do not end up responsible for someone elses debts.
Do not pass GO wothout it
0 votes
Suzanne Dick…, Agent, Sewell, NJ
Sat Mar 3, 2012
ABSOLUTELY run title and get title insurance never ever trust that banks wouls have clear title....always protect yourself!!! Good Luck....there are a lot of great deals out there! :)
0 votes
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