Foreclosure- Buyer Beware!

Foreclosed properties (houses or condos owned by the bank when the owner stopped paying the mortgage) are everywhere these days. From million dollar mansions to houses that are barely standing, banks are overwhelmed by the properties they now own. We were talking about foreclosures in my office's weekly sales meeting today and colleagues of mine were sharing stories that are very scary. When one purchases a foreclosure the bank often has "incentives" such as paying for the buyer's title insurance (a few thousand dollars in some cases) for using their title company. What I'm hearing is that these title companies are doing terrible work, not ordering title abstracts, and transferring the property without proper proof that they can do so. One agent in my office got a call last night from a client who bought a foreclosed property in March and came home to a foreclosure notice on his door from another bank. What buyers need to know is that you really should use your own title company and make sure there are no exceptions on your title policy in case claims do arise.