July 3, 2018 at 5:05 pm #17955
MilanParticipantJuly 3, 2018 at 5:05 pmPost count: 530
Title companies are driving me crazy with their long close. Few properties I am buying through couple title companies are now in 1 month wait and counting and still nothing is happening. When you contact them they are polite and they say: We are still waiting for title report. Grrrrrrrrrrrrrrrrrrrr
My question for you guys is: What is your strategy to make sure the seller doesn’t change his mind in this never ending wait. I know, I know, they signed purchase agreement. But I believe they can back off from the deal anytime if they want to. I am thinking about sending the seller check for $300 or so to keep him committed. What do you guys do?
Kevin FarrellModeratorJuly 3, 2018 at 5:38 pmPost count: 1265
Milan – I don’t know the answer. I think most title companies are drowning in work with home sales due to the boom market. They would rather close a $200,000 house deal than a $12,000 land deal. Maybe we can bribe the title companies.
www.FarrSyght.com Deal/Data ReviewMilanParticipantJuly 3, 2018 at 7:41 pmPost count: 530
Good point Kevin. I don’t blame them. It’s about the time to start doing 100K deals so they take us seriously. I wish all of us get to that level.
That makes me ask another question:
Anyone made 100K profit deal? If you did, speak up. Motivate us!!! Please please please!Michael AillonParticipantJuly 4, 2018 at 4:42 amPost count: 292
I think you’re on the right track. If you have a signed agreement with a decent EMD (300), that should keep the seller committed to the deal. Constant communication will also put him at ease. Convince him that it’s better to stick with you because you’ve already gone this far with him. Otherwise, he would have to start the process all over again with a new buyer.
If for some reason your seller were to walk away, and you REALLY want to buy the property, you could record a memorandum of agreement on the property and cloud the title. Then its just a matter of your lawyer negotiating a “release of Agreement” for fee.bwaldon4ParticipantJuly 10, 2018 at 9:08 amPost count: 75
Just published my first blog on the pitfalls of title insurance for land: https://goldenstateinvestors.com/3-reasons-title-insurance-is-probably-a-waste-of-your-money/MilanParticipantJuly 10, 2018 at 10:30 amPost count: 530
Great article Barton! I like the website too. You are an ambitious man!!!
I agree with everything you wrote in your article about title insurance. Where I find the challenge is to convince our buyers about this. I had 2 instances where buyer backed from the deal he was going to close 100% after title told him they won’t insure it because of some stupid paper that needed to be signed and notarized by owner from 1999.
Steve is saying in his podcast that I don’t have the right tools to figure out on my own the chain of title. But I use same tools you guys do. The guy I bought it from bought it from another guy and that bought it from another lady. And so on. Chain of title is there. Guess what? Often it’s not enough for title company especially if you self closed it. When you self close the land deal, that’s a red flag for title company.
So not only that title insurance is worth almost nothing (you get $4000 insurance? Really? The price you bought it for. Fantastic! Now I really sleep well!!) they want that insurance be there when you bought it. Otherwise it’s going to take forever for them to close and than after 3 months of waiting they will tell you they won’t insure it.
Anyway, that is my experience so far. I’m sure there are better renegade title companies out there. But I am still looking for them.bwaldon4ParticipantJuly 10, 2018 at 11:32 amPost count: 75
Thanks man! I am hoping to be able to use the article to educate potential buyers so they are “enlightened”.
Do you know of any escrow companies that close without title? The only one I knew of was Title Mind but it looks like they shut down.ChristianParticipantJuly 11, 2018 at 8:25 amPost count: 78
Barton, great and entertaining read. Thanks for sharing!bwaldon4ParticipantJuly 11, 2018 at 11:32 amPost count: 75
Thanks Christian! I appreciate the feedback.Neil HParticipantJuly 12, 2018 at 7:32 amPost count: 142
Barton, your article seems to be spot on. That said, have you ever used a “hold open” as a selling point? Such as advertising the land like “This parcel comes with a clean title and title insurance”? And a what point (property value) do you feel a title closing with insurance is necessary?
NeilNeil PalmquistParticipantJuly 12, 2018 at 9:42 amPost count: 14
Well thought out article, Barton!
Time can kill deals. There is no doubt about that …and I personally almost lost an income property once to an underhanded mortgage broker that decided he (his partner) wanted the property for himself. This was a 3 unit, HUD property and suddenly my wife and I were having problems getting financing because I was self-employed and my wife’s income alone wasn’t enough (allegedly). (Our credit has always been strong)
However, his partner was spotted snooping around the property by an REI friend of mine familiar with our purchase ambitions and the broker’s “methods”. He helped us raise $72K in a weekend (purchase price) and we purchased with cash and then refinanced to pay everyone back. (We threw in an extra $1500 to the investor friend that spotted the scheme.)
These sorts of individuals, probably don’t stay in business too long however. (Ours didn’t, anyway.) However, the Title Company watching out for owners may have an easier time doing so. Their hearts at least are in the right place.
However, this is a perfect reason why this forum is so useful. When we market to a new area, we can reach out to the community and look for input on which title companies are most friendly. Heck, a mention of who referred their services may even help the person who referred you get better pricing and faster service in the future. (OK… I admit I’m a little old school. This may be fictitious dreaming now.)
Ho hum… Keep writing my friend. Great contribution!
Neilbwaldon4ParticipantJuly 12, 2018 at 1:23 pmPost count: 75
I appreciate the feedback! In regards to the first question, selling a property “with” title insurance can be great for marketing. Even though the insurance is essentially useless, it makes the property “look” more premium and safe. Most of the benefits of title insurance is psychological in nature.
To you second question, I would avoid going through title on any deal you are paying $10,000 or less. Honestly, I’m reluctant even when I’m paying up to $20,0000. This is somewhat subjective, however. The bottom line is you only use title when you think it is necessary to complete the deal while remaining profitable.
Title insurance on land is never worth it in my book from the perspective of risk aversion. On the other hand, it can be worth it if it helps you sell a property for much more than you would without it.
Just my opinion.bwaldon4ParticipantJuly 12, 2018 at 1:41 pmPost count: 75
Sounds like you’ve had your fair share of craziness. I’m still looking for a good company I can rely on if I have a deal that absolutely needs title.
I was SO excited for Title Mind but it looks like they are closed now?Ryan PopeParticipantJuly 22, 2018 at 12:33 pmPost count: 9
Just jumping in on this – if anyone has large deals or option deals they want to take on, let me know. Happy to pay large assignment fees to jump in on a transaction! Good luck to all-
RyanBrad MelisParticipantJuly 23, 2018 at 2:12 pmPost count: 14
I’d love to chat with you about this. I have a few “larger” deals that might work with an assignment fee. Let me know if you would like to chat.
Thanks Brad Melis
801 971-3108Kathleen DeNault-RidgeParticipantOctober 24, 2018 at 1:24 pmPost count: 141
Barton and others,
I know this is an older thread, but….
When closing without title insurance (self-closing), is the issue of “uninsured title” ever a problem on the sell side if your buyer wants to close through title? If so, is there a solution once a self-close is completed?
Also, I’m considering doing a “hold-open” on a deal…the deal is under 10K and I just found out that power is not close by and would be an exorbitant cost to hookup…so, this will be an off-grid property probably recreational or vacation with solar or other method.
I’m not sure if a “hold-open” will increase the marketablility of this parcel as the chances of a buyer for an off-grid parcel wanting to close through title to get title insurance on a more or less recreational piece of land are probably slim.
Although a hold-open in this case probably won’t be expensive, I’m questioning the basic premise of title insurance for an off-grid property that most likely won’t become someone’s primary residence.
You must be logged in to reply to this topic.