Wednesday, January 13, 2010

Foreclosure Mills; Protect Yourself When Buying A Foreclosure

Foreclosures are priced low the market place, and these deals generate buyers and many closings for our office.  While they can be great deals, buyers need to know protect themselves best when closing on these homes.

Here is a great article about "Foreclosures Mills" from the perspective of the legal community.  Often these foreclosure mills deal in high volume and low quality and so does the title company (often owned by foreclosure mills) that are used in your transactions to buy a home.   Because there is little competency handling the foreclosures, details go missed, and recordings not properly done, and most of all they do not know how to correct the title problems (I lost a deal when the banks title company could not fix a problem after buyer waited patiently for three months, this could have been corrected in a two week period).  Here are some things you can do to make sure your closing has all of the "t's" crossed and "i's" dotted.

  • Negotiate to Pay for Owners Title Insurance:  Who ever pays owner title insurance policy in the State of Florida gets to select the title company handling your transaction.  You can have assurance things are handled correctly, your escrow is protected, thorough lien search is conducted, and you can close on time.  Most of ALL Someone Cares About getting your transaction right and going the EXTRA Mile.
  • Hire An Attorney:  In negotiations if the buyer will not use the sellers title company it could be a deal killer even though legally title insurance SHOULD never be a condition of sale.  Even though this is stated in the bank addendums, they always try to make it  a condition of sale. The attorney can be very involved to make sure ever step of the process handled throughly, correctly, and legally or an attorney can review a complete closing packge which is all documents at once before closing.
  • Follow the Big Boys:  That is California.   California recently passed a law that states the buyer can select the title company of their choice, they no longer have to use the banks title company.  Voice your concerns to lobby for Florida changes.