I am new to wholesaling and i am reading the posts here to get some answers i have been looking for.
As i was reading icame across some posts that said something like i went to title company did this and that with earnest money etc.
My question is what does a title companies role in with my part of the transaction?

The title company closes the transaction. It is normal procedure for your investor or retail buyer to give the title company your earnest money deposit. Or they may give it to you to give to the title company and they may just call to verify that it was received by them.

You cannot do a wholesale deal without a title company. Some states uses title companies and some others uses closing attorneys.

Although with some recent REO’s I’ve found it difficult to negotiate to a local title company, I prefer using local contacts as such develops a relationship which can benefit both in transaction efficiency as well as getting good, free information about properties I’m interested in.

Here in Cali, in our area, we have both title and escrow companies, and most title companies have an escrow division, so one can do a transaction totally in-house with the title company or use an independent escrow company and use the title company for title research and insurance only. I usually do both in-house. My current deal (bank-owned) would not negotiate to local so I’m using a remote escrow company and designated title company. I even offered to pay all the escrow fees and pay for the owner’s title policy to get choice but no-go. The deal was worth more than that control so I let it go. The escrow company sent a Fed-Ex label for my earnest money and will send a mobile notary to close the deal once everything is complete.

If I were doing a wholesale deal, I’d do everything in power to use local contacts. Throw in assigns, transactional funding, sequential closings and similar and the benefit of working with a local trusted and competent entity gains marked importance, not to mention one can talk to them face-to-face, which I prefer.

Good luck.

First of all buying REO’s the buyer/investor do not have a choice on the title/escrow the banks/lenders will choose. The only reason a buyer/investor want to choose if they are doing a double closing which the bank will not allow.

We had a recent one where the incompetence of the bank’s closing company led us to pay for duplicate services locally and close the deal locally. Time was of the essence because the house needed to be knocked down to proceed with commercial development of the land. The delays by the remote closing company were costing money and the seller (bank) ended up paying a penalty for delaying the closing. Our corporate attorney got involved and the local closing was the outcome.

A couple of examples of the ‘incompetence’ were ‘we’re waiting on the lender to fund this’ when the entire purchase price had been wired to them the day escrow opened and ‘we need a certificate of occupancy for the lender on this’ when there was no lender and the contract clearly stated demolition was the outcome. Those were two of many.

It look like the title company drop the ball.

As coincidence would have it, the escrow instructions I just received pointed to more information on the topic, relative to REOs in Cali, specifically Assembly Bill 957. The escrow company is specifically disclosing and impelling me to agree to disclosure of this specific legal parameter and to indemnify the parties as to its impact on said escrow.


Do you have a problem providing disclosure?

Be more specific. What kind of disclosure?

I definitely do have a problem with contracts of adhesion which are promulgated sequentially. I call this concept ‘trickle truth’. In my business, which is not real estate, it can get one sued, and successfully.

I think, in the next deal, I’ll pick a throwaway property and make their life miserable, just to test the concept of ‘disclosure’ and how it cuts both ways.

In fact, I stuck enough stuff into this one to test that sword so we’ll see.

In disclosure you must provide everything about the deal, if you hold anything back it could come back to bite you.

For the OP, this dynamic is IMO why establishing a close and consistent relationship with a local title officer can pay dividends, both regarding topics such as the nuances of disclosure, as well as information on properties and handling of your potential purchases. More information is good information.

In our area, nearly all the potential wholesale deals are REO’s or trustee sales so, as RealEstateSeller is apparently inferring, being on top of all aspects of a deal going in, even prior to disclosure, is of great benefit. AB957 shouldn’t have been a surprise to me. I should have known about it and the background of why it came into existence and why I was failing in negotiating a local close on the current deal and what the potential remedies were/are. In my case, the downside risks are minimal and it was just a learning experience. With a wholesale deal and the attendant complexities, such an issue could make or break the deal. Lesson: Do one’s homework more completely. A title officer can be of great assistance in that area. I had forgotten how fun this was, being away for so many years. Good luck in your pursuits.

Yea finding a great title company can make your life so much easier. You just have to ask them questions and find out whether they know how to do wholesale deals. They should be currently working with other wholesalers, closing deals for them. Most title companies you talk to will have no idea what wholesaling is (some will even tell you its illegal which is completely false). You just have to be persistent and find the one that knows what you need.

I wrote up a title company questionnaire that I use to interview title companies. If anyone wants a copy just shoot me an email and I’ll send it to you.