What are some of the questions to ask a title company when wholesaling? I know to ask about double closings but what else besides that? Thank you.
Omi
Ask them how they handle assignments, and what type of paperwork they like to see. If you use your own contract, ask them about that too… most prefer realtor contracts.
I know of a great title company who can close deals using Back-to-Back closing method or “double closing” in all 50 states. I also have many local title companies as well.
I don’t want to advertise the info so PM me for the contact.
THANKS!
To save money, see if after a few deals, they don’t charge you for title searches.
Allin08 - Please contact me as I’m interested in the title company information you have. Thanks! :beer
Rashuan Williams
Do anyone knows of any good title companies in Kissimmee, FL.
Share the info Alli. Contact me also about the title co. :biggrin
If you look at his user ID, it’s black. He doesn’t “live here” any more…
Also, please don’t make “contact me” posts…
Thanx,
Keith
Moderator
I apologize. I’ll remember. :banghead
Dealing With Title Companies and Title Issues
When does the title company get involved?
I try to get the title company involved as soon as possible and have them do as much of the work as possible. It is important that you choose a title company that has an attorney “in-office.”
The best company I worked with was a ‘Mom-and-Pop operation’ where the husband was the attorney and the wife was the title agent. In one year, I can attribute at least $70k in profit to working with this team. Your title company orders the appraisals, inspections, communicates totally with the seller after the contract, wires all funds and makes your life easier. Utilize them to the fullest. There is a lot of competition out there for this business and they know it. Once you start doing more than two closings per month you will want to negotiate all of the fees to the breaking point. Keep in mind that if your business is not profitable for them, you are not at the top of the list when their closing room is fully booked.
You will want to ask about ‘Affidavit of Interest’ and Other Form Filing
This might take a bit of searching, but this technique will save you time and keep you from having to be in one location to conduct your real estate business. In many cases it also has kept us from losing our assignment fees. Look online or in your yellow pages for Court Filing Companies. I prefer to look online because if they have a website there is a better chance they will work with you in this manner.
You will need to send them a limited power of attorney so they can notarize ‘Affidavits of Interest’ on your behalf. The file you send them will have your scanned signature included and they will notarize it and drop it at the courthouse. Ideally they will bill you for the charges incurred, but you can also pay them $100 in advance against upcoming charges. If you do this, please make sure to speak with the owner regarding this and write an instruction sheet to them on how this procedure should be handled.
A file should be opened on behalf of your company and all employees should be made aware of your arrangement. This is a small step that is fairly inexpensive, but has earned my companies well over $20,000 in rescued assignment fees.
In a wholesale deal a good rule of thumb is, AVOID THE CLOSING! Have your attorney draft a Limited Power of Attorney that allows them to sign documents for you so it is not necessary for you to attend.
For all you control freaks, I know this is totally counter intuitive to most people’s thinking, but here’s why. Closing a wholesale transaction consists of two meetings that need to take place in no particular order. The seller can come in and sign all of their paperwork first or the buyer. The significant difference is that if the buyer signs first the seller can leave with their check that day as opposed to having it mailed to them the next day or wired to their account later that same day. In the case of a double closing the buyer needs to come in first because you will be using their funds to close the first sale.
During one of my first closings I had the seller, the buyer and myself all in the attorney’s office. What was a $10k assignment turned into a $7k assignment after a lot of yelling, name calling and legal threats. After that I was completely gun-shy about closings. I insisted that people meet in separate rooms and I would purposefully pad the times to keep at least two hours difference between the seller arriving at the title company and the buyer showing up.
The key aspect we are trying to avoid here is “Renegotiation”. Many sellers come to closing with the thought in mind that they are going to renegotiate the deal. That they are going to demand more money for their property because Billy Bob from down the street is willing to offer them $5k more than you did. It is important to keep these meetings all business and to communicate well with the title agent that this is how you conduct business.
What do you say when the seller sees that you have sold the property for more and you are making $10,000 on the transaction? First of all, if you are not there you will not be answering this question, your title agent will. You will need to instruct them to answer as follows. “Your Company partners with several Investors to find them properties. This money is used for marketing costs, needed repairs, and other expenses related to the purchase your property.”
Just as sellers want to renegotiate, so do buyers. Let’s say you are making a $30,000 assignment fee on a property. I have sat on the other side of the table and purchased a property that I was going to rehab for $40k profit and the Wholesaler was earning a $30k assignment fee for basically getting the contract. These situations are another reason why you want to get as much money down as possible from the Investor. If a situation like this arises, and it will, the Investor will need to make a decision between losing their $5k deposit or going ahead and closing the deal. Keep in mind all the mortgages, appraisals, closing costs and fees have been assessed for the price that you agreed upon over coffee. They usually stand to lose $2-3k more than their deposit if they decline the deal. If they do decide to walk away, you are able to market your contract for $5k less and still make the same profit.
While you are just starting out you simply are not good negotiators. You might think you are, like I did, but that’s how I lost $3k in a matter of minutes in a closing room. Go figure.
By avoiding the closing people have to negotiate with themselves. At this point they are generally negotiating with the greed glands and the convenience factor. I have had no deals to date not close because I was absent. I have received a few phone calls from the title agency, but it has always been something I could handle.
When you see the call come in from the title agency, let it go to voice mail and make sure it is the title agent and not your seller or buyer. If it is the seller or buyer calling they will usually be emotional enough to leave whatever the issue is on your voice mail. Call back and speak with the attorney or title agent, but never the buyer or seller directly. If you arm yourself with a little bit of knowledge, there should be no reason for further negotiation at the closing table.
Hope this helps,
Matt Gerchow