Rochester Real Estate Attorney Discusses Closing Costs of a Foreclosed Property
I am often asked as an experienced Rochester Real Estate Attorney, about closing costs for a foreclosed property. Closing costs are spelled out in the contract, which lists the closing costs paid by each side. If you’re buying a foreclosure property, you will usually have to pay all the normal closing costs because, in most foreclosures, the seller will not contribute anything. They may not even provide a search or survey. Some may provide title insurance, but others may not. They may provide title insurance but not a survey. We strongly recommend that you pay for a survey and have it incorporated into the seller’s title insurance policy. Your costs are heavily dependent on what the contract says. Normally, although all of this can be changed by contract, you will pay for all the recording costs while the seller will usually pay the transfer tax. The seller will pay for the search and survey, as well as any necessary title corrections. Sellers will pay for title insurance if there’s a title defect they cannot cure (in this part of the state, title insurance is not normally used unless there’s a title problem or the bank requires title insurance). This is something that is addressed in the contract.
Some foreclosure properties incur a penalty of $100 a day for not closing on the projected closing date; however, those penalties are negotiable, not written in stone. You will often have to request a later closing date to have a survey done. We can have surveys done and, in the case of a rush job, a surveyor can do a survey within a week – or even less. A majority of foreclosure sales will not include the survey, so you will have to order one.
Are you thinking about purchasing a foreclosed home? Contact dedicated Rochester Real Estate Attorney Robert Friedman for navigation.