|  |  | | REO stands for real estate owned by a lending institution. In the wake of the subprime lending crisis of 2006 until the present this sector of the real estate industry is quickly growing as the number of foreclosures continue to grow.
The REO industry is based on very specific and detailed procesess which are neccessary to maintain control over the volume of properties which fall within this category.
Many new investors, agents and title companies, find these processes and rules cumbersome and unneccesary however the seasoned REO professional sees the value in these guidelines.
TITLE: In the normal real estate transaction, the buyer will get title free and clear of any and all encumberances and defects. This is commonly referred to in NC as MARKETABLE TITLE. In the REO industry, all contracts state that buyer agrees to purchase property via special warranty deed, and will accept title so long as a nationally recognized title insurance company will insure against any defects. This is known as INSURABLE TITLE. This is the normal operating practice across almost all reo departments in the country. BE AWARE OF THIS BEFORE SIGNING THE CONTRACT.
WHERE THE CLOSING TAKES PLACE: The STATE OF NORTH CAROLINA IS NOT AN ATTORNEY CHOICE STATE the choice of where a closing is to take place is governed SOLELY by the NCAR2t Offer to Purchase and Contract. All REO companies have their own addendum which will modify this term, and require that the closing take place at or with the office of the Attorney chosen by the Seller. At the time of publishing this web page this is legal, and as such a party signing such a contract is WAIVING THE RIGHT TO CHOOSE WHERE TO CLOSE. The general rule of thumb at B&K is that we will prepare the seller and buyer documents, certify title, prepare the HUD and disburse the Funds and we will be collecting a full fee for this service. The Buyer is free to chose his own attorney for review purposes, and to witness and notarize the documents, (at the sole expense of the Buyer). The SELLER CHOOSES WHERE CLOSING TAKES PLACE.
KEYS: The North Carolina Offer to Purchase and Contract Defines "Closing" as the recordation of the Deed and Deed of Trust. The Lenders will not permit the Buyer to take possession of the property until the Deed has been recorded. PLEASE PLAN ACCORDINGLY
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