Auction.com foreclosure purchase question

[Thomas O.]

I won a home off of auction.com a few days ago. I selected the title company that they recommended because I figured in this situation it may be easier.

I have purchased several homes and typically the settlement fee from the title company is $500 +\- $100, I was expecting a similar cost. This title company’s settlement fee is $1200. I spoke with them and told them that I was going to use a different title company, at that point they said their fee would still be $800 if I don’t use them or an additional $400 if I close through them. Does this seem crazy or is this common?

Thanks for the feedback!

[Chintal Patel]

@Thomas O.

Hey Thomas!

I’ve purchased multiple properties on Auction.com and Hubzu. These sites use the closing agencies that the seller selects. These sellers are almost always banks and yes, they usually are expensive to go through. It seems unreasonable to pay $800-$1500 for fees to the seller’s closing agency even when you are selecting your own. However, regardless of expense I would suggest that you select and use a title agency that you find yourself. Many times the seller’s closing agency is not looking out for you. Ensuring that you receive a free and clear deed is crucial for your success in real estate, it will be advantageous for you to find a title agency that you like working with and one that will watch your back on any title issues. I believe that it is worth the extra investment.

I hope I was able to give some valuable insight!

Good luck!

- Chintal