Daily Tip for Buying a Foreclosure
Today's Tip - Sometimes there are hidden costs associated with buying a foreclosed home. The bank that owns the home (seller) may not provide the buyer with a Owner's Title policy at closing. It is customary although not required in Michigan that the seller pay for and provide a Owner's Title Policy at closing. On a purchase price of $150,000 the cost for the policy is approximately $800.00. The title policy is extremely important to protect the new home owner from liens in the future. Other costs passed onto the buyer may be charges for de-winterizing the property for the home inspection and re-winterizing after the inspection. Approximate cost is $200. The seller may charge a REO fee of approximately $300. The buyer may also have to turn the utilities on in his/her name in order to conduct a home inspection. Guess who pays for this? The buyer!
Buying a foreclosed home can be a great deal. Be prepared for extra or hidden fees charged to the buyer.