As I was reading through some of the REO listings I noticed that almost all of them states that the bank will chose the title company. I also saw some non-bank properties witht the same requirement.
Is this normal? Do you usually see that and what do you usually do? Do you go with their title company?
I guess I would rather be in control and chose the title company I want, but I want to hear your experience/advice on this.
If the seller (bank) is paying for title insurance then they will usually pick the company. It shouldn’t matter much to the buyer as the coverage should be the same. The buyer, if getting a new loan, will usually be charged for the lender’s policy of title insurance.
Sometimes it’s local custom that determines. It used to be that sellers paid for the title policy in Southern California, and the buyer paid in Northern California. I always wondered how they figured it out in Central California.
Furnishedowner - thank you for the information. Actually I was not to concerned with the title insurance as I understand that they are basically the same as you stated. However I am more concerned with the escrow. I feel a little bit uneasy to have to put the earnest money in escrow with a company selected by the seller. Is this normal practice?
If the seller is paying the attorney fee, and has already performed the title search, then I will use the seller’s settlement agent if that saves me some money.
As a general rule with bank owned property, a lot of the work to deliver clear title has already been done by the seller’s attorney or designated title company. Why pay someone else of your choosing to do the same work that the seller has already paid for?
I wouldn’t worry either about putting earnest money in with an escrow company. In California they were all licensed. Ask the escrow company about their credentials. They should be happy to enlighten you.
Normally I would agree with you. But, this question is about REO property. In my experience, the REO seller dictates the deal – the forms to be used, the earnest money deposit required, and the title company to be used.
You can always use your own title company or settlement attorney for your side of the closing at your expense, but the bank will still use their title company for their side. The cost of getting your own way is not worth quibbling over such a trivial issue.