When it comes to getting great deals while keeping your sanity, forget the short sales.
REOs (real estate owned) properties are bank owned, post-foreclosure homes that the bank has little to no interest in holding onto. These homes are generally aggressively priced, and also seem to generate alot of interest. If you are lucky enough to grab ahold of one, there is a caveat lurking which you should know about.
In Sarasota County real estate transactions, it is customary that the Buyer of the property choose their closing/title company, as well as pay for title search and title insurance. With bank-owned properties, the bank often insists on closing at their own agent, and they will pay for title related costs on the Buyers behalf. While this may sound like a deal, a new article in the recent Sarasota Realtor magazine points out there are possible significant pitfalls.
A home is not to be sold without clear and marketable title. In other words, that there are no issues with easements and property lines, it can be used for its intended function, and that it is free from liens, claims and mortgages. These all must be removed before a buyer can comfortably purchase a property.
Unfortunately, the banks sometimes only provide insurable title, not “marketable” title. In other words, there may be a problem selling the home in the future. Also, some addendums only require banks to clear title in their sole discretion – not the buyers.
True Real Estate recommends using a real estate law firm to close on property transactions. It does not cost any more than utilizing any other title company or closing agent, but you are well protected by a lawyer. In circumstances where the bank is handling the title issues, we highly recommend our clients retain a lawyer to review any and all documents, most importantly title documents. The few hundred dollars it will cost you is well worth the peace of mind that major headaches will not emerge in the future.