Johnny, Home Buyer in Port Charlotte, FL

What other fees are associated with foerclosures other than the normal fees. Are thses titles free and clear or are there back taxes etc. involved

Asked by Johnny, Port Charlotte, FL Wed Jan 19, 2011

Whatother fees are involved with foreclosures

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Hi Johnny, you may also want a real estate attorney take a close look at the bank addendum's that will be generated which you will usually have to agree with. Make sure you are aware of the difference between a clear insurable title and a clear marketable title from your attorney.
1 vote Thank Flag Link Thu Jan 20, 2011
Dear Johnny,
There are typically no addition cost to the buyer for back taxes,liens or HOA fees on Bank Owned Foreclosures.It is usually the banks duty to make sure all these cleared up prior to the closing. While in some rare occasions some banks do ask the buyer to pay the doc stamps which run .007 per $1,000.
1 vote Thank Flag Link Wed Jan 19, 2011
Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funs are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.
0 votes Thank Flag Link Mon Apr 18, 2011
Hi Johnny,
Thought I'd answer this from a NH perspective. I have listed and sold many foreclosures here. In each case, the seller paid all liens, back taxes, etc. The seller has to convey a clean title that is free of encumbrances. The taxes are prorated as of the actual closing date, as in any other sale. Many people have asked me if they should buy a home at the foreclosure auction? My answer is do your homework!! If you purchase at the auction, you are purchasing with any of these outstanding items due, and in some cases with occupants that will need to be evicted. If you wait for the property to be listed with an agent and then make your purchase, you will be getting a clean insurable title to the property at closing, with no occupants. Many corporate sellers will dewinterize and rewinterize at their cost for buyer inspections, but many will not. If there is any question, it can always be an offer contingency.
0 votes Thank Flag Link Sun Jan 23, 2011
Dear Johnny;
You can get an outstanding deal on a foreclosure; BUT, because there are so many distressed properties in the market right now, many homeowners have been forced to lower their asking price dramatically in order to compete. Last week I sold a beautiful property in Port Charlotte in a $400.0k-$500.0k neighborhood for $54.23 a square foot. This was a 2007 completely remodeled and never lived in very updated home. It was a great deal. It is immaculate. Buyer's will still need a solid inspection but they don't have the headaches and expenses of rehabilitating a property that hasn't been kept up or vandalized. So don't eliminate Homes that are not REO's thay too are out there @ great prices.
Please feel free to contact me with any further questions at any time: 941-268-8918
Good luck
Sandra Rubinstein
Keller Williams Realty
Port Charlotte, Fl
0 votes Thank Flag Link Sun Jan 23, 2011
The Bank that owns the foreclosure property you are purchasing uses the Title Comany of their choice. You as the Buyer pay your normal fees associated with a new mortgage that you are applying for. ALL BACK TAXES AND LIENS ARE PAID BY THE BANK PRIOR TO YOU TAKING POSSESSION OF THE PROPERTY. Sometimes, there are problems with missing air conditioners, septic tank issues etc. In these cases, most banks will get an estimate on the cost of the repair or replacement. Sometimes they pay the entire amount, and sometimes they ask the Buyer (you) to kick in a portion of the repair/replacement. Each foreclosed property has its own unique issues. Hope this helps you in your home search. If you need a Realtor to work for you, please contact me.


Deborah Miller
RE/MAX Alliance Group
0 votes Thank Flag Link Thu Jan 20, 2011
Any fee the bank can get away with will be included in the foreclosure
Past payments, late fees, default fees, increased interest rate fro time of default, attorneys fees, trustee fees, title fees, signage fees, publication fees, clean out fees just to list a few.

Bob Patrick
Buy a home after foreclosure expert
Movin-On LLC
Helping families/people that have lost their homes get back into another in as little as 6 months
0 votes Thank Flag Link Thu Jan 20, 2011
The HOA, the stamp of title and attorneys' fee, all charges must be on the HUD
0 votes Thank Flag Link Thu Jan 20, 2011
In our market in Charlotte County Florida the title is free and clear at the closing table. All back taxes and assesments will be taken care of prior to closing. Some banks may have addtional fees but nothing to much, maybe a key fee ($100). Also some banks require the buyer to pay the doc stamps which is. 007 per thousand. It really depends on the house and the bank so get an estimate at the time you place an offer on the propety.
0 votes Thank Flag Link Wed Jan 19, 2011
Typically there are no extra closing costs for the buyer in a foreclosure transaction. I am in your local area and the foreclosures that I have listed and sold usually clear all back taxes, HOA fees and liens attached to the property. I have seen transactions where the lender requires the buyer pay the state doc stamps fee that in our area is a customary seller expense.
0 votes Thank Flag Link Wed Jan 19, 2011
To add to Julie's great information you may have to pay for dewinterization and rewinterization in order to do your inspections, and many REO listings will have you aquire the HOA docs on your own. If the government is the seller than be aware that they are congretionally exempt from paying transfer and recordation, so this may or may not have to be payed by the buyer depending on the local.
0 votes Thank Flag Link Wed Jan 19, 2011
There are no additional fees associated with foreclosures unless the home has been foreclosed on and the owner did not pay the taxes. This can play out one of two ways. 1 The new property owner (bank or government) will pay those taxes for you or you will need to pay those upon closing. Typically those are paid for you. Also, if the homestead exemption has expired you may pay a higher tax rate for the first year but will get that money refunded when you pay your taxes the following year. When you close on your new home you will be required to buy title insurance (this is true with any house) which will protect you from any title encumberance.

Hope this helps,
0 votes Thank Flag Link Wed Jan 19, 2011
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