Buying A Home
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Foreclosures (liens, back taxes)

If buying a forclosure, how do you protect yourself from the possibility that the previous owner has any liens on the home or owes back taxes etc?

I actually own a foreclosure now but can't really remember...I think we purchased enhanced title insurance but am not sure. 

Re: Foreclosures (liens, back taxes)

  • You will need to make sure that you purchase an owner's title insurance policy.  There will be two policies.  One that protects your mortgage company and then there is an optional one that the owner can purchase that protects them.  You should always buy one!  That should cover you should anything come up.
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  • We bought title insurance. We were on the fence about it originally. I asked our REA and she said she never bought a foreclosure without it and recommended it so we did.
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  • I would get an owners' title insurance policy on ANY house.  We've purchased two foreclosures, and I used to do closings when I was in private practice.  I recommended getting an owners' policy and a survey for all closings.
  • when we signed the p&s, the bank stated we were getting a free and clear title of any liens, taxes. If the bank owns it, I think they have to give you a clean title
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