Finding Wholesale Friendly Title Companies

[Kevin Quinn]

Hi everyone-  New to the website but highly interested and motivated to get involved in Wholesaling.  How do others go about finding Wholesale Friendly title companies?  Can you alternatively use wholesale friendly real estate lawyers?  

Thanks-

Kevin

[Karen Margrave]

@Kevin Quinn    First off, welcome to BP. You've come to the right site to learn about real estate. I can't say I'm familiar with wholesaling, as I've never worked that niche, but there are many on here that do. I'd be interested to read their advice.

There are always posts on BP about "investor friendly, wholesaler friendly this or that"  Personally, I don't understand the questions, and what is meant by it.

As to title companies, they get paid by selling "title insurance" and doing what it takes to insure title, and run escrows. They don't care what type of buyer/seller you are, as long as you get done what needs to be done in order for them to do their jobs, and make their money. 

All real estate agents, title companies, etc. are "business friendly" and want to make money. I think all buyers, no matter what niche they are in should understand what it is that agents, title companies, appraisers, contractors, etc. do, what is a "complimentary" service they won't charge for, and at what point they should be compensated for their work, and it would contribute to a much better working relationship. 

[Kevin Quinn]

Hi @Karen Margrave ,

Thanks for the welcome and your response.  My understanding is that only certain title companies will perform "double closings" or "assignment of contracts".  The challenge with the "double close" is that back to back closings are performed almost simultaneously and that the "assignment of contract" usually involves the wholesale simply collecting an assignment fee while the wholesalers' seller and cash buyer close with the wholesaler taking a cut.  I've called several local title companies (they also handle the closings here in Pennsylvania) and they indicated that they "don't do" double closings or "assignment of contracts".   Sorry if I'm oversimplifying as I'm still getting up to speed and thanks so much for your time.

Kevin

[Karen Margrave]

@Kevin Quinn  Thanks for the details, now I can understand what the issue is. It's kind of strange that the title companies are doing that, as it's a standard thing say for builders. For instance we buy a large tract of land and close escrow, we go through the process to subdivide (which can take months), and record that map. Then, we build on the lots and sell to a buyer. If we do it within do that within a one year time frame (from the lots being recorded and sale of the house) there's a special rate on the title insurance, and escrow, encouraging builders to continue to use them throughout the process. 

I don't understand why if a wholesaler was doing back to back closings that the title companies don't just adjust their rates to compensate for the double close. 

I hope you can get answers from others that actually work this. You might try doing a search, or checking out some of the podcasts on wholesaling. Good luck! 

[Bill Gulley]

The issue with double closings is to points brought out by ALTA as to having good title before passing title, if the first buyer doesn't have good funds available to close they are not paying consideration.

I suspect that if there is any issue with assignments, it's a local bias. Title companies do a lot of business with Realtors and Realtors may be raising heck about investors acting as agents, a title company gets business from Realtors and they may be avoiding the issue.

Assigning a contract is not illegal anywhere that I know of, I'd think I could probably go to any title company as an end buyer with an assigned contract and close it, it might be how I explain my deal, how I justify it and present it. The other thing is that all parties will be aware of everything, with wholesalers always trying to hide fees and mislead owners, it's no wonder title companies chase these types off. It's not the assigned contract that is the issue, it's probably more to how that contract was obtained, the intent, meeting of the minds, failure to disclose and the lack of good faith dealing in creating that contract.

BP is full of "How can I find an investor friendly...." all by newbies who are following guru junk. Ever think maybe it's the guru junk you might be trying to do?

All RE attorneys, title companies, Realtors and lenders are investor friendly, they all love investors, real investors and those that know how to use conventional means even if they are used creatively. They aren't the problem, it's the know nothings trying to do screwy deals that's the problem. There isn't any investor strategy used that can not be accomplished with conventional methods.

Want to do a double closing, take title and then immediately sell the property?

Easy, have the seller take a note and deed of trust for the full price with a call feature in the note, due on demand, close the deal, then sell obtain the money and payoff the note. That is a conventional and accepted method of doing either settlement! No title company can have issues with that! But gurus don't teach that I guess.

Again, the problem is that new investors don't learn the basics of real estate, they dive into gimmicks, strategies and methods of how to make money then try to figure out why things don't work out for them.      

To end this rant, know that in most communities everyone who makes a living in real estate and related activities have professional relationships, even those that compete for business have working relationships. When it gets down to it, all attempt to weed out bad apples, those they see that don't fit in to local customs. All professionals are public minded to some point, they will not participate in something that they may view as messing over the public. If you expect to deal with those that hold licenses, who are under regulatory restrictions, bonded, insured, hold to standards of ethics, then I'd suggest you learn what why and how they do things. :) 

[Kevin Quinn]

Thanks @Bill Gulley 

I appreciate your feedback and commentary.  I'm certainly not looking to do anything underhanded or sneaky.  I was of the understanding that completing a double close or assignment of title are completely above board but that some title companies are gun-shy or less receptive to those types of transactions.  Perhaps due to the reasons you mentioned as not wanting to take business away from their realtor relationships and because they're not accustomed to these types of closings everyday. 

Thanks again-

Kevin

[Karen Margrave]

@Bill Gulley sorry for hijacking your thread for this. 

[Bill Gulley]

Originally posted by @Kevin Quinn:

Thanks @Bill Gulley 

I appreciate your feedback and commentary.  I'm certainly not looking to do anything underhanded or sneaky.  I was of the understanding that completing a double close or assignment of title are completely above board but that some title companies are gun-shy or less receptive to those types of transactions.  Perhaps due to the reasons you mentioned as not wanting to take business away from their realtor relationships and because they're not accustomed to these types of closings everyday. 

Thanks again-

Kevin

Double closings or simultaneous closings were very common years ago, I'd bet that all settlement agents then would do them. There was an issue that came about (why I don't know) but the finding was that using funds of an end buyer were not available for that seller to use in the first transaction, consideration was not paid for the title being passed. To the second, that makes perfect sense, the first transaction is clouded. The American Land Title Association (ALTA) put this out about 2 years ago I believe, they write the rules.

The saying "all real estate is local" applies in several ways, the grapevine can kill an investor. :)