I am purchasing a single family foreclosure home in Kansas City that is bank owned and there is a delay in closing due to the title

Question: I am purchasing a single family foreclosure home in Kansas City that is bank owned. According to neighbors, the home that has been vacant for a year and a half. The bank accepted my offer and I submitted an earnest check in early November, 2011. A clear title seems to be the delay. My question is do banks put homes on market without clearing liens and loans?
– Stan K. from Overland Park, Kansas


Answer: Stan, I hope you're working with a real estate agent. If not, your real estate purchase could get tricky. Yes, it is common for banks to put homes on the market before they have clear title. In addition, it is not uncommon for liens to pop up on the home after the foreclosure process. Once the contract was accepted, the contract was probably sent to a title company to start the title process. 


As a real estate agent, I have typically have a title company pull a title commitment the first week.Also typically before closing, I will get a call from the title company that a lien as just been issued on the foreclosed home. The liens can be tax liens, home association liens or a mechanic liens. In addition, sometimes, the title was not cleaned up when the home was foreclosed on by the bank and the title company may have missed the liens.


On a foreclosure home, the liens should be cleared up fairly fast. If they are not, as in your case, I would suggest contacting the title company directly and ask them why there is a delay in closing. Maybe paying off a small lien can solve the problem.


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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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