Real Estate Deal Analysis & Advice

The #1 Rule to Successfully Close a Real Estate Deal

Expertise: Real Estate Investing Basics, Personal Development, Landlording & Rental Properties, Real Estate News & Commentary, Business Management, Flipping Houses, Real Estate Deal Analysis & Advice, Personal Finance, Real Estate Marketing
247 Articles Written
smiling brown-haired man with glasses and shadow of a beard evaluates exterior of a residential property while wearing suit and carrying a folder

Let’s make this short and sweet.

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A lot of investors who have bought multiple properties and understand the real estate game might think this is a no-brainer. But I'm going to tell you right now that's not the case—a lot of people don't know.

Over the last five years, I can’t tell you how many real estate investors have sent us money to purchase a property—as in directing funds to our company account, instead of to the title company. I've also witnessed countless investors hand over deposits for a particular purchase, or even the full amount, directly to the seller.

Guys, listen up: the number one rule when you are looking to buy or sell a property is hire the services of a title company. I’m begging you!

Related: Types of Deed & Ways to Take Title: Everything Investors Should Know

Why You Need to Hire a Title Company

By enlisting the service of a title company, you'll acquire an account representative who will look after your best interest as the buyer. They'll act in the best interest of the seller, too.

The title company is there to act as the mediator. They are the ones who are going to do the searches for back taxes or liens. They are the ones who are going to prorate rent or deposits if the property is tenanted. They are the ones who are going to hold your hand through the entire process, including where to send money and how to send money.

What’s more, they’ll be the ones to send you the final HUD-1 Settlement Statement, showing you all the charges related to the real estate transaction, line item by line item. If you have questions about it, give them a call. They can walk you through it!

I can’t emphasize enough how important it is that you work with a title company and avoid giving any money directly to the seller—none, meaning none of the deposit or purchase amount.

Sure, it’s a nice thought. I love all our investors who send money directly to us. But, unfortunately, we have to send it back.

So, make sure you work with a title company! I cannot stress it enough.

Here’s another thing: make sure to get title insurance.

Related: What is Title Insurance? The Real Truth About How Title Insurance Works

You wouldn't believe how many properties I've bought where the title company overlooked certain things when they were searching for liens. Thank goodness I paid extra money for title insurance, which protected me if and when they made mistakes.

It’s human interaction; mistakes do happen. For this reason, it’s best to find a reputable company. Do some Googling. Or just go to another investor or company in town that’s investor-friendly.

That’s my Australian two cents.

I know it may sound weird to more experienced investors. But trust me, many new investors screw these things up. I’m hoping after watching my video, that will no longer be the case!

Have you seen investors make the same mistake? Have you made it yourself?

I’d love to hear from you. Comment below.

Engelo Rumora, a.k.a."the Real Estate Dingo," quit school at the age of 14 and played professional soccer at the age of 18. From there, he began to invest in real estate. He now owns real estate al...
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    Marc Sollberger Rental Property Investor from Texas and Australia
    Replied over 1 year ago
    Thanks Engelo. From a fellow Australian setting out in the US market that is a great tip! Much appreciated. Marc
    Engelo Rumora Specialist from Toledo, OH
    Replied over 1 year ago
    Thanks Marc and no worries at all 😉 I wish you much success
    Michelle Fenn Real Estate Agent from Cleveland OH
    Replied over 1 year ago
    Another bit of advise. When the seller is an auction house or bank. Pay the extra money and get the services of a buyers title company. I have witnessed enough transactions as a buyers agent to question whether the bank’s title company is really a neutral party.
    Engelo Rumora Specialist from Toledo, OH
    Replied over 1 year ago
    Thanks Michelle, I suggest always getting your trusted title company to run title on all deals. Anyone that doesn’t do it is taking a HUGE risk IMO. Thanks again
    Tola Kehinde Rental Property Investor from Vaughan, ON
    Replied over 1 year ago
    Thanks Engolo.. for the tip
    Engelo Rumora Specialist from Toledo, OH
    Replied over 1 year ago
    No worries Tola, I’m happy to help Much success
    John Murray from Portland, Oregon
    Replied over 1 year ago
    About to close on a lease option and waiting on the buyer to open escrow to close. Here in Portland Oregon you have to an energy audit and a bunch of other crap to appease the closing Gods. Great advise for the newbie real estate investor E-Man!
    Engelo Rumora Specialist from Toledo, OH
    Replied over 1 year ago
    Wow mate, Sure does sound like a pain in the A$$. Crazy times we live in with many restrictions and things getting harder and harder to do. Thanks for your kind words. I do my best 😉
    Craig Pfeffer Rehabber from Louisville, Kentucky
    Replied over 1 year ago
    What about a wholesale deal? Just do the deal without giving any money to the seller?
    Engelo Rumora Specialist from Toledo, OH
    Replied over 1 year ago
    Hi Craig, I’ m not following. Can you please clarify? Thanks