What You Need To Know Before Buying a Lender-Owned Home

January 7, 2011 at 10:38 am Leave a comment

by: Maria Hass

When purchasing a lender-owned home, it is common practice for the seller — which is the bank — to determine the title company that will process the transaction.

These lenders and banks base their decision on who gives them the best deal in regard to title costs. But the banks do not consider the title costs to the buyer. In some cases, lenders may choose a title company in California that charges anywhere from $1,000 to $3,000 more in total title costs to the buyer.

Unlike in Arizona, California title fees and escrow fees are two separate charges resulting in a double charge.

I was surprised to find out in one of my transactions that my buyer was charged close to $7,000 in closing costs rather than the expected $4,500. As I looked deeper into the HUD statement detailing the items included in the closing costs, it was apparent that the title company based out of California charged $1,000 more in title costs compared to Arizona title companies. Fortunately, the seller paid $4,000 of the buyer’s closing cost. So, the buyer did not assume the entire cost.

If you are looking to buy a lender-owned property, find out the charges of the title company selected by the seller prior to signing the contract. That way, you will have an idea of your expenses and there will be no surprises. You could also negotiate if the seller would agree for the buyer to choose the title company. It is unlikely, but there is no harm in trying. After all, buyers used to decide the title company until the age of REO properties came about.

Entry filed under: Arizona Real Estate, Chandler Real Estate, Foreclosures & Short Sales, Phoenix Real Estate, Real Estate Deals. Tags: , , , .

WHY BUY IN ARIZONA? HAFA is a Joke

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

Trackback this post  |  Subscribe to the comments via RSS Feed


Categories

Feeds


%d bloggers like this: