How to buy a REO with a clean title?

Asked by Sophie, Dallas, TX Mon Dec 3, 2012

I am interested in a REO, and I heard that a bank usually cleans up titles of a property after it buys a foreclosed house. However, I also heard about a bank might not do a good title search. What should I do?

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Sally Grenier, Agent, Boulder, CO
Mon Dec 3, 2012
First of all, a property cannot change title without releasing all liens. The bank HAS to clear up any outstanding liens on the property. Second, part of your closing costs include Title Insurance. You can opt for extended coverage that will cover you if there were any unrecorded liens. Finally, you should talk to your REALTOR about any concerns you have.
1 vote
It can change title. You might not get title insurance, but if it is a cash transaction, title insurance is not required.
Flag Fri Dec 7, 2012
Dixon Wong, Agent, Dallas, TX
Mon Dec 3, 2012
Hi Sophie,

Title Company wont able to close your new home without a clear title. You will also be issued an Title Insurance that will covers all title unclear change.

I would be more than happy to help you with a home search specific in foreclosure property.

You can visit my website at

JP and Associate
1 vote
Sherry Renfr…, Agent, Frisco, TX
Mon Dec 3, 2012
Hi Sophie-

There are federal laws that lenders (banks) must follow after foreclosing on a home and clearing up liens for a clean title are one of them.

Also, when your contract is accepted and sent to title, the Title company will perform an in depth title search and history for that property. If any thing arises, it is paid by the lender at closing. The Title insurance you get is the policy that will cover you if any thing strange arises in the future after you have purchased your home.

I highly recommend hiring a real estate agent to help you with this process, and one that has experience in REO's, such as myself! I would be honored to help you with your home search and provide daily information on new REO's that hit the market.

Since there are less coming to market, the majority of them end having multiple offers with the home going to the highest offer.

Please feel free to visit my website to learn more about me.

Best regards,

Sherry Renfroe
Ebby Halliday Realtors
(214) 215-4145
Mobile Site:
1 vote
Bruce Lynn, Agent, Coppell, TX
Fri Dec 7, 2012
It's not the bank you want to do the title search it is the title company and you want to get title insurance.
Every property you buy should have a clean title and title insurance against it. This is a normal procedure and in most cases the seller including banks will pay for the majority of the title insurance.

Call me directly if you have questions about this.

Bruce Lynn
Keller Williams Realty
0 votes
Nathan Malka, , Dallas, TX
Tue Dec 4, 2012

Banks are not interested in having a portfolio of homes,
Title company are resposable to provide a clear title,
0 votes
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