There can be a number of risks associated with the purchase of an auction property. When searching through less traditional ways to invest in a property, you might’ve considered a bank-owned foreclosure or an auction property. Since the purchase of an auction property can typically pertain to a higher amount of risk than a traditional real estate investment, you’re going to want to invest in lender’s insurance and owner’s title insurance. Why is it essential to invest in insurance on an auction property? Read on to find out more!
Title Insurance and Auction Properties: Typically Have No Home Inspection
Typically, when purchasing an auction property, you will waive your right to a home inspection and inside look of the home’s interior. This means that you’re taking a chance on a property that likely has a poor interior condition. You’ll likely have to perform your due diligence when it comes to an investment in an auction property, including searching for outstanding claims and liens that may be outstanding against the property. Additionally, you’ll want to secure owner’s title insurance as a full measure of protection in the event that any undiscovered liens, claims, and occupants come with your new property.
Owner’s Title Insurance Can Protect Your Investment
Since there’s various levels of high risk involved in the purchase of an auction property, you’ll want to secure owner’s title insurance in addition to your lender’s title insurance. Owner’s title insurance can protect your investment in the event that there’s outstanding debts against your property or current occupants that you’ll need to evict. Think of owner’s title insurance as your guaranteed right to the title of your property, no matter what.
Consider How Homes End Up For Auction
The majority of homes that end up on the auction block are typically houses that have an extensive history. This includes houses with an unpaid mortgage in default, foreclosures, property tax default, and so forth. This can be financially risky for a homeowner making an investment on the property because you never know what type of debts are outstanding on the property that you’ll be held responsible for. An investment in owner’s title insurance can help protect your financial assets so that you can move forward with your goals for your auction property!
A Title Company You Can Trust: Colony Title
At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, and LinkedIn.