REO title work?

[Joe Boggin]

my second buy and hold is a forclosed property.  its next to a co worker of mine.  he told me to check it out.  i did.  i got the agents number and we spoke.  the agent told me i hate to wait 9 days because owner occupants get first dibs.  i waited.  i made an offer half of the list price.  it was accepted!

the agent is not a wholesaler but works for a large reputable real estate company.  (long and foster)  the agent specializes in short sales and forclosures.  i signed my purchase agreements last week and i had to wait a week for the bank to sign documents.  they did two days ago.  i asked the agent..."so is the house mine??"  he told me the only thing that would kill the deal is if the inspection isnt satisfactory for me or if the seller cant clear title...

my title questions. with REO properties i was told the house would inherit free and clear title. i looked on my city website and the bank is infact the property owner and there are no back taxes. if there are small water bills or anything im not worried, but im just wondering if i should get another title search done by a title company im familiar with or just trust the system that is? is it the norm to inherit free and clear titles with forclosed properties?

[Steve Babiak]

You definitely want to get tax certs and utility certs, and maybe even code violation records. Especially if it's in Phila where water and gas both can be liened on the property. All towns like to charge fines for code violations. You don't want those not-so-little utility bills and fines to become your problem. You want the bank to pay them at closing, and that will give you good title with respect to these municipal liens. One REO I bought outside Phila had over $2K in delinquent sewer bills, in addition to delinquent trash bills; the bank paid them at closing.

Then there is the matter of other sorts of liens that might cloud title. A title search should uncover anything like this. 

Get title insurance. 

Now, are you using the bank's title company, or are you choosing your own?  The bank's title company gets lots of business from the bank, so you can guess who they might side with in case of disagreement on something ...