Buying a Foreclosure? Remember the Title Search!
While buying a home at foreclosure auction has serious upside potential, there are some risks. In particular, when one purchases a home at auction, the buyer takes on all of the liability of the property. The risks include:
- liens (like mortgages, back taxes, mechanics liens, etc.,
- assessments, and
- easements (recorded legal rights to the property or portions of the property).
Evelyn Friedman, director of Boston’s Department of Neighborhood Development has cautioned buyers considering buying a home at a foreclosure auction, because some properties sold at such massive auctions have title problems. “What I understand is that some properties haven’t always cleared title,” said Friedman.
A buyer should “They have to understand what they are signing. If they do in fact win a bid, they should make sure they can get out the deal if whoever is selling it does not have a clear title.” However, most buyers in the United States purchase title insurance, which protects the buyer from any title problems that may arise after sale (such as liens that were missed during the search). The title insurance company issues a report and issues an insurance policy in support of its findings.
In short, title searches for foreclosures are imperative, but a title search and title insurance when buying a foreclosed home in Boston should help to alleviate the concerns above.
Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically to your feed reader.
[...]While buying a home at foreclosure auction has serious upside potential, there are some risks. In particular, when one purchases a home at auction, the buyer. Read more [...]