As many of my fellow REO investors know, bank appointed title companies are creating an involuntary and very lucrative "profit center" for themselves. We have purchased several REO's recently and have been hit with "transaction fees" and "closing fees" and get this: "environmental fees" ; in some cases over $500 worth.
Usual and customary here in Florida puts the cost of a title policy and insurance on the seller, and typically, the party that chooses the title company is the party that pays for title insurnace. That makes sense, but we have seen a trend of title companies charging the buyers fees of $400 or more. What really makes this insulting is that in this area, most of the REO closings are handled by title companies in South Florida and as a result, we do what is called a "mail away". We have to hire a courtesy closer and pay that as an added fee. We wind up getting no real service for the fee.
This may sound like a complaint, and many of you may be thinking" hey your'e stealing the house, so what's a few hundred bucks?" I get that, however, if you are NOT told this when making an offer, you wont know to adjust you offer accordingly. Unfortunately, I have never had an REO agent tell me upfront that I would be paying these fees,
My point of this post is to warn other investors to this trend to help them to avoid the same "sticker shock" that I have received! REO's can be bargains , but buyer beware!