So, you’re thinking of buying a foreclosure. Here are some title issues you need to make sure are covered/cleared before you close:
- IRS Lien: Make sure if there was a lien from the IRS that it has been released – they have up to 120 days from the date the final judgement in foreclosure was entered to redeem a property.
- Quitclaim Deeds: If a lender uses this method of conveyance after foreclosing on the previous owner, this could create problems with the title, which creates problems if financing as the new lenders require a lender title policy.
- Junior Lien Holder: Make sure all lenders (1st, 2nd, 3rd, etc.) have been satisfied through the foreclosure. If not, it could be costly if you have to go through the re-foreclosure process.
- Tax Deed Holder: Did someone purchase a tax certificate on the property?
- Vacant Property: Check for easements – there may not be room to build the home of your dreams!
- Existing Buildings: Has the home had some recent building upgrades, i.e. room additions, new roof, etc.? Check for proper building permits for that work. If no permits were pulled, it could be costly getting the local governments approval “after the fact.”
- Insurable Access: Has the property been platted or properly subdivided? Just because there is a road to the property, it doesn’t always mean you have legal access to use it.
- Improper Lender Named: Loans are sold so often, make sure the current lender was the one listed in the foreclosure suit.
- Code Enforcement Liens: Did the previous owner incur liens for not mowing their lawn or some other code enforcement item? This type of lien usually survives a foreclosure suit and must be paid by someone.
- Unpaid Municipal Liens: Some liens for unpaid utilities are not required to be recorded – Municipal Lien searches are becoming more common practice.
10 good reasons to have an experienced REALTOR® and real estate attorney helping you with your transaction!
(SOURCE: Article written by Tyra N. Read for the FloridaRealtor® Magazine)
Looking to buy a foreclosure (a/k/a REO or Bank Owned)? As of this writing, there are 193 REO properties in Sarasota County listed in the MLS – here is a link for you to view them: Current Bank Owned Listings