I cannot find a title company that will work with me on houses purchased at auction. As has been recommended, I have tried to open an escrows on properties I have purchased at auction to get a preliminary title report, but no one will do it. I have purchased 3 homes at auciton this year and plan on buying 4 more in the next twelve months. Most of these will be to re-sell, so I do not have final control over where the escrow goes. Anyone have a recommendation for a title company who will work with me?
I have always countered offers to require use of my title co without issue.
I’ve used Fidelity, Chicago, First Am, and others in the past.
That said I have seen some reluctance by title co’s when working with new investors. It’s absurd. Trustee sales wipe out much of the title history making properties purchased at auction a lower risk to the title co in my humble opinion.
I am interested in your question and am hoping you can clarify. If you bought an auction property (at the Court House) how would you have time to open Escrow and get a Prelim? Aren’t you already the new owner? How can you get Title Insurance after the purchase?
Thanks in advance.
The question was regarding opening an escrow in advance of getting an offer to make sure there was not title defects prior to close of escrow on the flip, not to get insurance for his purchase of the property at auction. Generally you can not get an owners policy on a property purchased at auction.
I made a simillar inquiry to get title insurance on a property purchased at the court house, having bought several. Head managment of Fidelity took the time to explain why they do not. There is simple too many things that are unknown in the foreclosure process for them to insure your ownership. For instance law suits after the fact from previous owner for any tech failure in the process. You can go down to the County Recorders office and do your own research on the computer using the know name of the previous buyer and seller before you. Also by tracking those names Grantor/Grantee index on film year after year. It can be done, I have gone back all the way to So Pacific Railroad ownerships. Very time consuming but depends what you are researching for.
The title companys will handle the sale of your property to another, doing prelims, title and insurance etc. in the future but not insure the court house purchase for yourself even if you pay them to do so… they simple will not as a policy of how they do business! I tried… Hope this helps, Best to ALL
Hi Brigitte - Thanks for sharing this, it is what everyone will likely experience. That said it is a pretty stupid policy on behalf of the title companies. The reality is that insuring title on foreclosure purchases is LESS risky then most of the business they do. Why? Because most liens and encumbrances after the recording of the original loan are wiped out - giving them years of risk free title. I do understand their concern about certain issues around the foreclosure process (for example fraud/collusion), but they can simply add an exception to the policy for this. Keep in mind all title policies have LOTS of exceptions so this approach would be nothing new and with thousands of properties selling at the courthouse each month they are missing a good opportunity.