Best way to do due diligence with title, back taxes, liens, etc?

Rehabbing, Fix and Flip, Rental Properties
1

Hi,

I’m almost ready to get my feet wet with some SFH, non HOA, on a bank owned REO.

Will I need to research if there are any back taxes, liens etc, before placing the offer? I know of the title companies. I’ve done personal residence closings for myself. Title company covers my back, yadda, yadda.
Or is this a moot subject, since closing agent (title/escrow) company will do the research and these will need to be paid by seller anyway? Or is it different with Bank owned REOs?

Just don’t want to get my hand caught in the cookie jar, in case my offer is accepted, and then I get that “light bulb in the sky” Why did I forget such and such…?

Regards,

Douglas

2

Why would there be delinquent taxes? It’s a bank owned REO. If the bank owns it, you can be assured that either the taxes are paid and any leins have been paid or they will be at closing.

Keith

3

Keith:

Thanks for the info. I’m new at buying (trying to) rental prop, so I did not know if there were any “catches” compared to regular property buying.

That’s a relief.

Regards,

Douglas

4

There are actually a lot of gotchas when dealing with banks. It depends on what state in you’re in and how things are normally done. They’re not done that way with REO’s as they like to use one method to cover the entire country. Some states have offers and then go to P&S. Banks just like to go to P&S. Usual fees that are paid by the seller sometimes in the fine print it says that the buyer pays for them. Normally if you have an attorney, they will tell you about those or if you have a real estate agent they’ll tell you. With a REO, usually they’re so busy that you should always use a buyer’s agent when making the offer.

But of course with respect to liens and the like, those are all normally paid off at closing. If you buy it at auction, sometimes those items aren’t cleared up, but in the P&S it should say that they’ll all be paid off.

5

…and, oh, yeah - get the Title Insurance!

Keith

6

Kdhastedt and Henryinma:

Thanks for the comments. You’re all correct. Best get a buyers agent, and I always pay for title insurance. You just never know and those couple hundreds will save you tens of thousands in case of problems.

Regards,

Douglas