Sub2 Insurance ?

General Real Estate Investing
1

when you do a Sub2 deal do you get Title Insurance? Is this a one time fee or a monthly fee?

Do you get Property Insurance?

Which insurance is the one everyone mentions with speaking of Sub2 deals?

thanks

2

when u buy s2 u usually have an attorney close it or u can close it so no need for title insurance unless you are using a title co. title insurance is a one-time fee for closing. the s2 ins u r most likely asking about is property insurance for you the owner and contents insurance for the buyer. then when they buy it outright with a new loan they need both title insurance and their own property insurance for their new lender. hope that answers your question

3

If I’m closing with a lawyer don’t they still need to do Title Insurance to see if there are any leins on the property?

For my personal home we have the mortgage insurance and then property insurance. Which is the one that everyone says the mortgage company will see a change on and go through with the DOS?

So when I buy it SUB2 how should I get the insurance with the seller so that his mortgage company will still be covered?

Thanks so much for the help :slight_smile:

4

I have done this in the past and it wasnt a problem, but be aware that the servicing company could still catch this and then research the title and see if there was a violation of the DOS.

I listed the owners lender as a loss payee on the insurance that I took out and paid for. I also listed as a secondary loss payee, the seller of the property. Its not a fool proof way of doing things, but it went well for me on that one.

As for title insurance, if I’m buying a property, and if I dont have the knowledge of how to do a lien search, I would pay the few hundred dollars that a owners title policy would cost. For the proof of knowing what the liens are and the fact that the title company will eat the debts if they are wrong, its worth having in my mind.

Oh one other thing that most buyers are not aware of. When you go to get a loan on a property and the lender requires a title policy, they are getting a lenders title policy, this is not in any way a owners policy, so if there is a defect in the title, then the lender is covered, but not the owner. So if your concerned about title coverage when your getting a loan, you would then need to get and pay for both a lenders policy and a owners policy.

5

Thanks so much Kevin I really appreciate the help. That helps make it a little clearer for me.