LandInvestors.com Forums **Ask A Question** Title Company Fee Concerns

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  • #20319

    Jacob Parker
    Participant
    Post count: 2

    Hello all,

    I’m just about ready to send out my first offers. I’m left with just one concern. I’m not completely comfortable performing my own title checks due to the possibility of missing any issues. I’d prefer to go through a title company but the fees seem to eat away the profits on low price properties. For example, the title companies I’ve spoken with have told me to expect to pay between $1000-$1800 on top of a $1200-$2000 property. On the low end, this puts me at $2200 in without marketing/mail costs, on a property I’d expect to sell for approx $4200. So for the experienced investors out there, do these numbers seem realistic? If so, what would you do? Handle the transaction without the title company, go through the title company, or avoid these lower priced properties all together? Any advice is appreciated!

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  • Christian
    Participant
    Post count: 78
    Pro

    $1,000-$1,800 sounds outrageous to close a deal of that size. What state are you looking to mail in? The most I have ever paid is $700-$800 (when I’m covering all closing expenses) and those are for properties that I’m buying for $5k+. I don’t go through a title company unless I’m purchasing for $5k or more.

    If you plan to start doing some of these lower value deals ($5k and under), I think its in your best interest to learn how to self close. It will give you way healthier profit margins by saving on the buying sell and then saving on the selling side. If a buyer wants to go through title, I tell them they need to cover closing costs.

    In regards to doing your own title check, a lot of the lower value property I buy, the seller has owned for 20+ years. Little chance there are going to be issues with these… but its possible. See something you don’t like? You’ll just have to dig a little deeper.

    Reading through these forums and going through the LA education will bring you up to speed on how to self close. If you are diligent, you will see an issue and choose to not buy the property or to take it through a title company who can resolve the issue. Depending on your current real estate experience and knowledge level, it will take you some time to learn how to self close. But if you plan to stick to this business, it will pay off.

    Of course there is always some risk in self closing but that’s just the nature of doing deals. My opinion anyway.

    Jacob Parker
    Participant
    Post count: 2

    I’m going to be sending out the mail in Colorado this weekend. Thank you for letting me know your costs associated with closing as the prices I was being told seemed excessive even without experience.

    After some more speaking with a few more title companies, I’ve found one that will actually conduct a lien/encumbrance check for just $20 dollars, I’ll skip out on the title insurance solely due to the low cost of the properties and the plan to sell quickly. I’m comfortable with tracing previous ownership through county provided records.

    The plan now is to have this title company complete the lien/encumbrance check, and my partner will self-close once we’ve received word that the property is clear. He’s familiar with the process as he’s an agent in the state of Georgia.

    Neil H
    Participant
    Post count: 144
    Pro

    I paid ProTitleUSA $135 to do a tile/lien check on a property I bought in Colorado that I self-closed on — http://www.protitleusa.com

    My limited experience with closing with title in Colorado is that the minimum property value they cover is $85,000 — so even if you go in with a property in the $5,000 to $20,000 range, you’re still being charged upwards of $1290 for a closing with title insurance and a hold open.

    Ron Mayfield
    Participant
    Post count: 65
    Pro

    Jacob
    FYI…while liens and encumbrances are important to check out that is not going to address your initial concern on title checks. That will either come from (A) your research, (B) someone like ProTitleUSA (have not used them), (C) an attorney or (D) a title company. Sometimes you will have enough information at your fingertips to make the call and sometimes you have to pay the piper or pass.

    Milan
    Participant
    Post count: 531

    The only reason I really use tittle companies to close my deals is beacouse it looks good for the buyer who doesn’t know anything about closing RE deals. It’s a mainstream fashion I would call it. And title companies are taking full advantage of it with their rediculous fees.

    I’m being charged $1200 title fees for 10K property. The insurance is for 10K. Now if you read a fine print, you’ll find out that that’s what you get when problems arise 10 years down the road.

    If sellers sibling comes to claim the ownership on my parcel of land I have insured for 10K but it’s really worth 40K + I built 150K dollar house on it. And the sibling is right, I will get 10K from title company back. Because I underinsured for $1200. What a fantastic deal were getting hahaha!

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