It is commonly known that a buyer should perform due diligence before purchasing property. If the buyer fails to perform due diligence (obtaining a building inspection, phase I environmental report, mold inspection, Chinese Drywall inspection, survey, etc.) the buyer may incur significant unanticipated post-closing costs and liabilities.
When purchasing property at a foreclosure sale or a property that has recently been foreclosed, a buyer must be even more diligent in his or her inspection of the property and title to the property since the buyer, in most cases, is purchasing the property “as is.”
In any type of purchase, a buyer must be concerned with the title to the property. This is especially important in today’s market since so many properties are in foreclosure. What if the foreclosure suit named the wrong lender as the plaintiff? What if a junior lien holder was not named in the foreclosure suit? These situations and many other situations can leave a buyer with title to a property that is not insurable and can cost the buyer thousands and sometimes tens of thousands of dollars to correct.
Most title companies do not understand the complexity of legal matters involved in a foreclosure suit. Further, a title company does not represent either the buyer or the seller in a real estate transaction and cannot provide legal advice to either party.