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reo seller uses a Special Warranty Deed - I try to research it online, but all I get is they only warranty the deed since they acquired the property, which is reasonable. I am getting an owners title policy, so is a Special Warranty Deed anything to be concerned about ?
A Special Warranty Deed limits the warranty made by the seller. The seller is responsible for during the time of their ownership of the property. They do not want to take on any liability for issues on the title created at any time prior to their ownership of the property after the foreclosure.
If you are buying property especially without a full title search, strongly recommend getting tile insurance...
It is standard for an REO seller to use a Special or Limited Warranty Deed. Like the previous posted said, this limits their liability to the time they actually owned the home.
Your true protection will come from the title insurance policy. This is what will cover you in the event that someone asserts their interest in the property after the closing.
It is also wise to make sure your title agent, realtor or attorney takes the time to contact the local municipalities (utility office, building department, HOA, etc...) to make sure their are no outstanding issues that you may end up with post close. Often times there are large unpaid utility bills or city citations for high grass that don't show up on a routine title search that must be addressed. A new buyer can get stuck with these charges if they are not taken care of prior to closing and your title insurance policy may not cover these types of issues!
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