Do you get a clean title when BUYING A SHORT SALE or BANK OWNED HOME?

By
Real Estate Agent with Godzyk Real Estate Services

There was alot of confusion with Manchester NH Home Buyers with the risks involving buying a SHORT SALE, FORECLOSURE or BANK OWNED HOME? With different information coming from so many sources questions on these types of properties continue to rise. I am happy to report that the most risk is with auctions which most buyers are not using tio purchase these types of properties. For the average owner Occupied Buyer there is plenty of protection available to you for a seamless purchase.

 

 


HOW DO I KNOW THE DEED IS CLEAN?:  The most common protection is a through a TITLE SEARCH. A title search will make sure the deed is free and clear of all mortgages, liens, back taxes and or HOA fees.

a. First thing is that if you are getting a mortgage than your bank will make sure the title is clean before they give you a mortgage. The bank will work with the closing attorney to review the title report. 

b. If you are paying cash, you will want to hire a lawyer to conduct the title search and make sure the title is clear.  

TITLE INSURANCE: Whether you are paying cash or getting a mortgage,  it is recomended to get owners title insurance.

CLOSING: Before closing a HUD also know as the settlement statement will be calculated. The closing attorney should make sure all liens, back taxes, HOA fees are paid by the seller at the closing. Any prorations for prepaid amounts will be debited to the buyers side. in the world of short sales at your expense.

In conclusion buying through an auction is seperate from buying Short Sales or Bank Owned Homes listed by traditional means  An auction is AS IS and usually includes all liens and defects. Purchasing a home listed with a local broker is not like an auction. The condition may be AS IS but the deed is cleaned, cleared and usually a Foreclosure or Special Warranty Deed transfers the home from the bank to the new buyer. Having a local, Full time agent who is WELL experienced with Bank Owned Homes and or Short Sales can easily guide you through the buying process.


It does not take magic to turn your "For Sale" sign into a "Sold" sign. it takes a full time Local Agent who specializes in Listing homes like yours.

 

If you need to sell your home and you owe more than your house is worth, i may be able to help. I specialize in working with home owners to get your home sold. There are many options such as a short sale whcih may be able to help you.

Please try and avoid out of state or out of town agents and companies that make "out of this world promises". We are local agents with experience who never charge any up front fees. WE GET RESULTS!!!

 

We stand by you through every step in selling your home.

 


PLEASE SEE MY "TOP" TIPS FOR BUYING A HOME

 
 

PLEASE SEE MY "TOP" TIPS FOR SELLING A HOME

 

 

 
 
SUPPORT LOCAL BUSINESS!!!
 

ONE OF NEW HAMPSHIRE'S LEADING AGENTS FOR SHORT SALES AND BANK OWNED HOMES...

If you are Looking for a Real Estate Agent you have come to the right place. Scott Godzyk is a Full Time and Local agent ready to serve all of your Real Estate needs through each step of the buying or selling process. We are proud to be locally owned and operated.

If you owe more than your house is worth, If you are behind in your payments, I may be able to help. Call me to find out how you may be able to sell your home at no additional cost to you.

Scott Godzyk is the Owner/Broker of The Godzyk Real Estate Services located in Manchester NH. With 25 years of Real Estate experience Scott specializes in Listing and Selling Bank Owned Homes, Short Ssles, Residential Properties, Condominiums, New Construction and Investment Properties. Scott services the counties of Hillsborough, Merrimack, Rockingham and Belknap. To contact Scott Godzyk please call 603-661-2121 or email sctprop@aol.com. his website is www.ScottSellsNH.com.

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Rainmaker
1,156,960
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Thank you for the comment Irina.

Jun 13, 2012 02:28 PM #4
Rainmaker
1,156,960
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Thank you for the comments and SUGGEST John.

Jun 13, 2012 02:28 PM #5
Rainmaker
1,156,960
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

Elizabeth that is awful, I am going through it now but not to that extent. It is an important topic that is for sure

Jun 13, 2012 02:32 PM #6
Rainmaker
111,122
Jerry Morse
The Morse Company - Janesville, WI
BBA,GRI

I try to have my buyers use an attorney through the process, but, of course, some do not. 

Jun 13, 2012 02:55 PM #7
Rainmaker
269,751
Mike & Eve Alexander
Buyers Broker of Florida - Windermere, FL
Exclusively Representing ONLY Orlando Home Buyers

In Florida, most title companies are incompetent...and you can't rely on a title insurance policy...you need to read it.  Title Insurance underwriters are rated just like car insurance....and title insurance policy can exclude everything under the sun.

We have a short sale deal closing this friday that an attorney is reviewing for us and not only is there no clear title, no lein search was done (they claim because the bank would not approve the charge) and the title insurance has an EXCLUSION for the back taxes owed.

This is not the first time.

The best thing that a buyer can do is hire their own title attorney to do all the paperwork and closing.

Eve in Orlando

Jun 13, 2012 03:17 PM #8
Ambassador
1,827,817
Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

Great information Scott.  Also make sure the title insurance policy you are getting will cover you in case of after purchase surprises.

Jun 13, 2012 05:03 PM #9
Rainmaker
2,099,329
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Very good information for home buyers.  All should purchase title insurance.

Have an outstanding week with your camera in hand.

Jun 13, 2012 05:30 PM #10
Rainer
57,445
Wayne Jackson
Lakeshore Realty 208-714-4109 - Hayden, ID
North Idaho Realtor, Serving Coeur dnullAlene and Hayden Lake

Thanks Scott, Very good advice. Banks can't be trusted, they will try to pass on leins to the buyers.

Jun 13, 2012 05:54 PM #11
Rainmaker
1,104,232
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Scott -- A good post.  However, want to just add that buying a property that has been foreclosed and then listed in the MLS (REO) is not necessarily going to fly.   I had a situation where my clients wanted to buy an REO property.  The title company ran title and the wrong entity foreclosed.  The REO contract state they only have to give "insurable title" and the defective foreclosure was excluded.  My clients hired an attorney.. the problem is with the insurable title that excluded the faulty foreclosure, the title insurance will NOT cover this defect.  Also, with this title defect, it is not possible to refinance or sell in the future.  In addition, the former owners have 1 year (Statute of Limitations) to bring an action due to the faulty foreclosure... so REO properties come with some risk as well. 

Jun 13, 2012 07:27 PM #12
Ambassador
1,615,971
Ed Silva
RE/MAX Professionals, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

This is a good post. So many buyers have questions on the issues associated with short sales and auctions and need to fully understand the mechanics in the deal.

Jun 13, 2012 07:42 PM #13
Rainmaker
823,118
Mike Cooper
Winchester Real Estate Sales, Cornerstone Business Group Inc - Winchester, VA
Your Winchester, VA Real Estate Pro

Scott, here in VA we have an attorney mill that handles a large portion of the REOs.  I found out late last year that the attorneys are not filing all teh paperwork to get a clean title.  The sad thing is they won't do anything else.  So, every buyer has to buy knowing they could end up in court at some point.  Title insurace is a bear.

Jun 13, 2012 07:52 PM #14
Ambassador
1,108,426
Melissa Zavala
Broadpoint Properties - Escondido, CA
Broker, Escondido Real Estate, San Diego County

I think that a lot of people do not truly understand title and the importance of clean title. Great idea for a blog post.

Jun 13, 2012 08:53 PM #15
Rainmaker
496,039
Jan Green
Scottsdale, Phoenix, Cave Creek, Carefree, Fountain Hills - Scottsdale, AZ
RE/MAX Excalibur Scottsdale REALTORĀ®, GREEN


Great post.  Here in AZ, buyers of REO's receive a Special Warranty Deed, which does not provide the same protections that a regular Warranty Deed provides, key distinction.  Thanks for posting!

Jun 13, 2012 09:19 PM #16
Rainmaker
97,265
Jennie Miller, PLLC
Buy/Sell/Rent Your Home in Phoenix Metro Area - Scottsdale, AZ
AZ Broker - Real Estate Services 480-382-9681

Many buyers don't realize they get a clear title when they close on the house.  This is good information!

Jun 13, 2012 09:59 PM #17
Rainer
127,257
Frank Iglesias
Working With Houses, LLC - Atlanta Real Estate Investments - Lawrenceville, GA
Atlanta, GA Real Estate Investor

Read the title commitments the bank gives you prior to closing as sometimes those exceptions listed are potential baggage you may not want to carry along on your new purchase.

Jun 14, 2012 02:15 AM #18
Rainmaker
1,210,614
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Excellent tips and advice!  My hair stood on end while reading Elizabeth's #3 comments.  Fortunately, those cases are usually the exception to the rule.

Jun 14, 2012 02:58 AM #19
Rainmaker
810,415
Al Raymondi
Ocean View Realty Group in Ormond By The Sea Florida - Ormond Beach, FL
Ormond By The Sea Florida - Home and Condo Sales a

Nice post Scott, title insurance is a must and here it is usually paid for by the seller.

Jun 14, 2012 05:25 AM #20
Rainmaker
564,956
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

Scott, I get this question all the time.  the waters out there these days are a little tricky to navigate, but people ask this question a lot.  I don't think they totally understand the answer, as some do not know that title can be insured.

Jun 14, 2012 06:20 AM #21
Rainmaker
1,343,302
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

In the old days..(old old days), you signed the back of the deed and it now belonged to whoever held that paperwork. Look what it has evolved into

Jun 14, 2012 06:37 AM #22
Rainer
192,492
Keith Lawrence
RE/MAX Properties - Mahwah, NJ
ABR, CDPE, SFR, 203K Specialist

Good advise.  Always get title insurance.  I had one short sale where the lien was filled the same day as the closing.  You never know what is going to occur when dealing with Short Sale or Bank owned properties.

 

Keith

Jun 14, 2012 07:55 AM #23
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