Buying Pre-Foreclosure House
Q: In buying pre-foreclosure house, what caveat should I be awared ? Is Title search and insurance enough ? I know Bank will do some search before they will approve a loan too. One of my concern is that the seller may owe government or bank money, what measure should i take to ensure that I won't get into trouble before closing? Any help will be appreciated.
A: Part of the title search involves pulling judgement reports on the seller(s). Title Insurance covers you in case the title company missed something (extremely rare). I would strongly urge you to get both lender's AND buyers title insurance. If it's a (pre) foreclosure, you already know they owe the bank money. The bank gets paid out of proceeds from the sale, paid directly by the settlement company, the seller will never have the funds in their own hands.