Auction.com and title!! please advise

[Sebby Vasalo]

Hello,

I won two properties on auction.com

Both have judgements on them as per the preliminary title report and doing my due diligence I found at clerks office.

Property 1) 8k lien from credit card

Property 2) 2k and another for 2k.

I am wondering if I really need title insurance from their suggested closing company or if I would be fine just having my lawyer do all of the work.

I really do not want to pay for a lawyer and also title insurance if one or the other is not needed, but I do want to be able to take a line of credit against the properties and sell later down the road with no hassles.

Please advise.

This is one of the responses I got when I asked them if the title would be cleared at time of transfer.

"If you buy title insurance, then your property will be conveyed with a Special Warranty Deed, which would guarantee your title against those two defects. In this situation, I could not see as to why they would be cleared without title insurance, unless cleared by the previous owner. Title insurance is something to bring up with the closing company- they will have more information regarding that."

[Chad U.]

@Sebby Vasalo

All online auction sites, Auction.com, Hubzu, homesearch, etc, operate in the same manner.  If it is indicated that a Special Warranty Deed will be offered, this means that all liens will be cleared upon the transfer, otherwise you'll be given a quit claim deed.  So if the SWD cannot be conveyed due to clouded title from extraneous liens, they cannot sell the property to you and you will get your deposit back.  

But to answer your question, and as everyone else has suggested on here, YES, get the title insurance and use your own title closing agent/attorney.  Especially if this is your first purchase.  The title insurance will protect you for issues on title that may come up years later, which could have been missed on the title search at time of purchase (apart from any stated exclusions, that is).  The underwriting company who offers the insurance is responsible for remedying any defects that are found in the future.  

And only use their title agents if you are comfortable with reading title commitments, know how to navigate a closing and what to look for.  I've used the auction co's closing agents a few times, and they are very unorganized - they miss outstanding utilities, neglect to record deeds, forget to get power of attorney affidavits for signing deeds, etc,etc, etc.  It's like babysitting and telling them what needs to be done.