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In the face of the changing real estate market, more and more people are considering purchasing properties at a foreclosure sale or purchasing properties that have been foreclosed and are presently being sold by the lender. While the opportunity exists to obtain some properties at good prices, the process for purchasing the properties and the possible problems associated with their purchase are different than traditional real estate.
Buyers need to make up their minds early in the process as to whether or not this is a property they can live without. Foreclosure property may have various title exceptions that need to be resolved prior to closing in order for the purchaser to own the property free and clear (good title). These issues can cause delays in closing and possession that can become a problem for purchasers who need to take immediate possession (i.e., perhaps they have sold their house). On the other hand, a person who is investing in the property as rental property may have the leisure of waiting as long as necessary to close with good title.
If you take only one point from this brief article, let it be that you should always have the title searched on any property you are purchasing. Regardless of how well you think you know a property or its owner, matters affecting the title may exist as a result of a prior owner or as a result of typographical, but critical, errors.
The title to foreclosure property often has its own unique pitfalls. The party handling the foreclosure must be careful to follow the legal requirements for publishing and giving proper notice of the sale, and often the foreclosing mortgage-holder is not the only mortgage-holder. People often incorrectly assume that any property bought at foreclosure must have a clear title; however, there have been many instances where a title cloud was missed at the time of the mortgage, and the problem must be cured to give clear title to the new purchaser.
Bobo, Hunt & White has been handling real estate closings for more than 75 years and has a real estate department staffed with employees devoted to full-time real estate processing. As agents for First American Title Insurance, our firm has a reputation of being able to resolve title issues and bring closings to the table. When your closing is in our hands, your dream house is within reach.