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REO Contract Addendums and title risk
2010 Dec 16, 2:27pm 2,097 views 4 comments
by danix follow (0)
Comments 1 - 4 of 4 Search these comments
use wikipedia...
Warranty Deed
The grantor may give a general warranty of title against any claims, or the warranty may be limited only to claims which occurred after the grantor obtained the real estate. The latter type of deed is usually known as a special warranty deed. While a general warranty deed was normally used for residential real estate sales and transfers, special warranty deeds are becoming more common and are more commonly used in commercial transactions.
http://en.wikipedia.org/wiki/Deed
quitclaim deed
http://en.wikipedia.org/wiki/Quitclaim_deed
A quitclaim deed is a term used to describe a document by which a person (the "grantor") disclaims any interest the grantor may have in a piece of real property and passes that claim to another person (the grantee).
disclaims, no warranty of title against any claims. This will be clearifed by TI search.
"The seller is providing title insurance" Great.. do so, making sure you get it from TI directly and document the contact person.
"…seller may receive and consider other offers even after current offer."
No sense pussy footing around here.. either you have a deal or not. Get them to sign!
Under Common (Contract) Law, for RE, you only have a deal when its signed and delivered.
elliemae
2010 Dec 18, 6:42am
With title insurance, there's a buyer's policy and a lender's policy. My experience is that this is required at time of sale if you're using a title company, some states it's paid by the seller and some it's paid by the buyer.
If you have any questions, find a lawyer. So what if you have to look a little harder?
As we've gotten deeper into the deal, more red flags. They switched the escrow company from what was in the contract. They want me to agree to go with their title and escrow choices, while admitting that I know I have the right to choose.
So far we are still in the deal, but I'm not budging on choosing my own title insurance.
We held our ground on the title insurance and we record tomorrow morning!
I've read about some of these before, such as here:
http://www.nakedcapitalism.com/2010/09/latest-real-estate-time-bomb-title-of-foreclosed-properties-c...
Now it's my turn (after 4+ years of watching the market and listening to Patrick!). We've had an offer verbally accepted on an REO property, and I have to agree to the 21 page REO addendum, which overrides the contract where there is conflict.
I could go find a lawyer to review it, but real estate lawyers don't seem common out here on the West Coast (Contra Costa County).
So it looks like my choices are a) sign it and get the house, b) refuse and the seller walks.
My biggest flags, paraphrased, since I cannot reproduce the document:
...seller shall furnish a special warranty deed, a quitclaim deed, or other deed to convey insurable title subject to this contract. How are these different from a normal deed? Is this a concern?
...seller may receive and consider other offers even after current offer. OK, fine.
...property may be subject to approval by a private mortgage insurer, repurchase by the prior servicer, or may not have insurable title. In any of these cases, they have to return earnest money and that's it.
The seller is providing title insurance, which seems a little unusual? It does say I can get my own if I want to.
Appreciate your rapid feedback, the clock is ticking :)
#housing