I have an offer in on a bank-owned foreclosure, and as part of the counter it has "Title will be conveyed by a Special Warranty Deed". Should I be concerned about this? I am used to Grant Deeds. And since the bank owns this, all the liens, judgements, etc against the property have been settled, right? I shouldn't have any more worries about a clean title than with a normal purchase? I'd just hate to get this place and have someone come after me for someone else's debts!

IRS liens may not be cleared, what if two owners ago the husband sold the property without getting his wife to sign because she had ran off.
Or perhaps there is a problem with construction or repairs being done without a building permit.

So I would not buy it without a full home inspection and search for any building permits and also have a complete title search done and purchase title insurance

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Originally Posted by Fr_Chuck

IRS liens may not be cleared, what if two owners ago the husband sold the property without getting his wife to sign becuase she had ran off.
Or perhaps there is a problem with construction or repairs being done without a building permit.

So I would not buy it without a full home inspection and search for any building permits and also have a complete title search done and purchase title insurnace

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Home inspection and title insurance goes without saying. I'd be doing that if this wasn't a foreclosure! The counter also has the following wording: "Seller has/will opened title work/closing order. Buyer agrees to accept title work and pay for Buyer's/lenders title policy." Does that mean that the bank is not having a complete title search done? This house is at an exceptionally good price, and suits me well, and there are multiple offers in on it. So I want to make my odds of getting the place good, but not at the cost of future legal problems!

Bank will not be doing any title work, But if you do a complete title search it should be OK.

I received a Special Warranty Deed when I purchased a foreclosure from the bank. It was REO (Bank Owned). In my situation it cleared all outstanding liens but was used since the bank had been involved in a lawsuit surrounding the property and this extinguished all interest of any other party.

A quick call to a Title Company in your area should answer the question without costing you anything. Make the call before you buy the property.

I would advice getting a title search, but no, don't matter what bank may have told you, a special warranty deed by nature and law does not give you any warranty ( promise) that there are not other lien issues.

This is why it is not a normal Warranty deed which gives you that protection. In fact even a warranty deed does not say it is clear it only says the seller will pay for such legal action to clear it, if it is not clear.

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