What is the title search process for REO properties? Does the bank take care of it or will I do this after making an offer?

Asked by Kindofaquirk, Atlanta, GA Tue May 10, 2011

I'm asking because there is a property that should be coming on the market soon and I want to give a strong offer (e.g. Cash offer, inspect before offer so no inspection contingencies, and a short closing period)...but I'm not sure how the Title search should factor into my proposed closing date. Thoughts?

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Sally W. Ham…, , Atlanta, GA
Tue May 10, 2011
The attorney that closes the loan will do the title search. The attorney will be chosen by the bank. You will want to buy Owner's title insurance. It is a small investment for a lifetime of guarantee on the title,

Sally W. Hamby
Senoir Mortgage Banker
Fidelity Bank Mortgage
404 644 7696
2 votes
..., , Lexington, MA
Fri May 13, 2011
You can have a title search done prior to submitting your offer, otherwise it's part of the buyer's normal course of business to have one done.
0 votes
Jane Fadgen, Agent, Alpharetta, GA
Wed May 11, 2011
The short answer is this. In an all cash deal, you will be responsible for getting a title search done. Any competent real estate attorney can do this. Then you should buy owner's title insurance. Your attorney can fully explain why. If you need a referral to a good real estate attorney, let me know and I can give you some names. If you want to close quickly, go ahead and line up the attorney and ask how long he/she will need to complete the titile search. It should only take a few days. You should ask for a full title search, which goes back 60 years.
Hope this helps. Good luck!
0 votes
Sarah Moore, Agent, Atlanta, GA
Tue May 10, 2011
You need an agent to help you in an all cash transaction (or any real estate transaction). I would recommend contacting an agent intown to help, if this is where the condo is located. I'd be happy to assist.

Sarah Moore, REALTOR®
Cell: 678-641-7925
Web Reference:  http://www.sarahsoldme.com
0 votes
Margaret Ke…, Agent, Woodstock, GA
Tue May 10, 2011
When a property is foreclosed on, the attorney representing the lender will have already done a limited title examination. Once the foreclosure process is complete, this limited title examination may be updated. This type of title examination will only go back about 10 years or may only cover the owner who was foreclosed on.
The property must have a clear and marketable title in order to be sold. You can protect yourself by purchasing owners title insurance at the time of closing. This will give you certain protections that you would not have otherwise. Typically if you have a mortgage you will see that title insurance has been purchased -- but it's for the lender not the owner.
And as has been mentioned before - find a professional Realtor to represent you. Working with the REO's and the closing attorneys and understanding it all is not something most people want to jump feet first into.
0 votes
Hank Miller, Agent, Alpharetta, GA
Tue May 10, 2011
Get an experienced agent to represent you - key word experienced - or you will be banging your head agains the wall.

Cash is great but they don't really care, you will have a set time to arrange financing and after that you are expected to close. I tell my cash clients to consider a mortgage (http://hankmillerteam.com/pay-cash-home) ; gives me another bullet to use in negotiations. If they go FHA, there are specific lender requirements that must be fixed....appraisers pick on things (I'm one) and typically the seller is responsible. It's also another back door is needed for the buyer.

Typical bank owned homes will not be sold "cheap" until they season on the market, the days of things selling 30% off at listing are long gone. The entire REO/bank owned sales world is changing - reading up on it is only going to get you in trouble - get an agent.

0 votes
I can appreciate trying to sell yourself and services, but this forum is meant to help fellow investors and answer questions accurately. Cash buyers can have the same, if not better, bullets as those buyers with financing. There are still great deals to be had from REOs, it just takes a little market knowledge and negotiating tactics, nothing new to the game. I'm just getting very annoyed with all of the poor advise for personal gain on these forums... it's not helpful.
Flag Tue Oct 11, 2016
Darrell Hess, Agent, Asheville, NC
Tue May 10, 2011
Kindofaquirk I mentioned that I would give you a link with tips to remember when purchasing with cash, but did not included it in the answer below. Thus, here is the link in a new response. If you need a good buyer's agent in your area let me know and I will be happy to refer you to an agent.

0 votes
Thomas Kris…, Agent, Atlanta, GA
Tue May 10, 2011
To echo some of the answers, the title will have to be clear to close. You simply cannot close until title is clear. However, it is a good thing to be diligent in making sure it is clear before you close. Your Realtor should be the one taking the lead on making sure this gets done. Even though I have bought and closed on numerous REO properties myself, I still make sure these things get taken care of. In addition, the bank will provide title insurance in case there is something missed. I would be happy to help in anyway I can.

Kris Holt
Solid Source Realty, Inc.
Web Reference:  http://www.HomesByHolt.com
0 votes
Erica Brown, Agent, Atlanta, GA
Tue May 10, 2011
The lender must convery a clear and marketable title. However, you should also make sure the lender provides you with title insurance to protect your interest. But most importantly, you should work with an experience REALTOR to help guide you through the process. Keep in mind the agent that will list the property works on behalf of the seller. Who will work on your behalf?

Erica Brown
REO Agent since 2002
Web Reference:  http://www.ericabrown.net
0 votes
Kindofaquirk, Home Buyer, Atlanta, GA
Tue May 10, 2011
I do not have an agent yet. I've just recently taken an interest in a property in a friend's condo complex that is being foreclosed on and I've been reading up on the process for buying REOs while I'm slow at work. Couldn't quite wrap my head around the title search process, so I thought I'd ask here. Thanks for the replies!
0 votes
Darrell Hess, Agent, Asheville, NC
Tue May 10, 2011
Saw this question in my email and wanted to answer it for you, however the agents below have pretty much covered it all. Anything more would be an echo.

Keep in mind there are some other important factors to keep in mind when buying with cash only. I'll put them on my blog.

Best of luck to you!
0 votes
Carmen Gutie…, Agent, Marietta, GA
Tue May 10, 2011
When you buy a foreclosed property it will be sold AS IS but the seller must transfer clear marketable title or you are not obligated to buy. After the offer has been accepted and you have a binding agreement, the closing attorney you chose will take care of the title search. If they find some clouds on the title they will not be able to insured the title until everything has beed cleared. Make sure to tell the attorney you want title insurance without exceptions.

You should have a realtor to represent you in the transaction to get more advice. The seller pays our commission so why are you cutting yourself short??

Carmen Gutierrez
Cell 770-366-1487
0 votes
davidwbrower, , Woodstock, GA
Tue May 10, 2011

Most of the time, especially if the home hasn't been foreclosed on for that long, title work has not been completed and won't be until under contract and assigned to a closing attorney. You don't "have" to use the closing attorney recommended by the seller, but some sellers (banks) will actually pay for your title insurance if you use their closing attorney. You might as well since they are paying attorney fees and your title insurance. Ask before you commit to their selected closing attorney... despite what the bank's agent says, no seller can dictate who the closing attorney is. With that said, title is pulled and if the seller can not provide clear title, their may be a delay in your closing date. So, it's irrelevant when you want to close. You will close when the seller is able to provide clear title. If the foreclosure hasn't been recorded yet, which in many cases, the foreclosing attorney is delayed in recording, you will be waiting. But my real question is.... WHAT DOES YOUR REALTOR ADVISE?
0 votes
Richard Burt…, Other Pro, Alpharetta, GA
Tue May 10, 2011
The bank will provide Title Insurance to protect their Interests. You NEED owners title insurance to protect your interests.

Like any other form of insurance, you hope you don't need ithowever if you do, it is a lifesaver.

As an investor and Realtor I have purchased over a dozen homes personally and bought owners title insurance on every one.

If you need help, contact me at 678-488-0183
0 votes
Juneann Lewis, Agent, Duluth,, GA
Tue May 10, 2011
That is the closing Attorney's job. Give me a call if you need some help. I will be happy help you.

Juneann Lewis
Web Reference:  http://www.juneannlewis.com
0 votes
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