Foreclosed properties are at a higher risk for having title defects and issues. If you are interested in purchasing a foreclosed property you need to be proactive. You’ll want to protect yourself, your new property, as well as your money, and any profits you are hoping to gain from the purchase.
Before buying a foreclosed property confirm that the property has been through a thorough title search and that you have purchased title insurance. Our experts at True Concept Title are here to explain the importance of title insurance for a foreclosure:
Before You Purchase a Foreclosure
Purchasing a foreclosure property can be an exciting as well as a profitable endeavor if done properly. Some foreclosure properties are trickier to fix up, you don’t want to feel like you bought a possible money pit. In cases of bank owned properties, you’ll want to do your research first.
It is extremely important to know that any debt, liens, or any other claims do not follow a homeowner—they stay with the property. By ensuring that the title is clear of any of these before you purchase the property, you will help mitigate your risk of inheriting someone else’s costly problems.
Debt does not follow the homeowner; it stays with the property!
If you decide to invest in a foreclosed property, make sure that the title search is done by a reputable and experienced professional, such as the experts at True Concept Title. Remember that title insurance is a one-time fee that covers your property for as long as you and your heirs own it should any issues arise. This is something invaluable and should not be pushed aside. Call our national title insurance team at 813-263-7168.
Learn more: Total Guide to REO Properties
Foreclosures May Involve Higher Risks
Title insurance is especially important when buying a foreclosed home because there are often more title issues that arise when purchasing a foreclosed property.
Here are some examples of why buying a foreclosure property involves more risk—and why title insurance is important:
- Title warranties may not work with a foreclosed home as they do with a new home
- Problems may arise after a title search
- Outstanding debts and liens may be present, thus resulting in dealing with lienholders and creditors during the foreclosure process
- The property may be occupied by tenants that will need to be evicted after the sale
Know your Liens: Liens 101
Title Insurance Protection
Title insurance is a protection for property owners. This is especially important for foreclosed property owners due to these properties being at a higher risk for title issues.
When a homeowner purchases title insurance, the insurance acts as a defense against a possible defective foreclosure. The title insurance company now has the duty and obligation to defend you in court if a problem does arise with the accuracy of the title, regardless of any mistakes that may have been made by previous mortgage service providers. This legal protection is invaluable to a property owner.
Common title discrepancies that title insurance protects are:
- Falsifications of title documents
- Unknown or undisclosed successors
- Errors made during the title search
- Any mistakes or oversights in any legalities
Ease Your Title Worries
Buying a foreclosed property is a big investment. Do not let something like forgetting to purchase title insurance be your financial downfall.
At True Concept Title, we are a professional, full-service title and closing company that understands the big legal and financial picture of purchasing a foreclosed property. If you are looking for help with your national title search or insurance, call True Concept Title at 813-263-7168.