I've started a thread and asked several investors, but nobody seems willing to answer a simple question. It felt like the local investors I met were guarding a trade secret. I'm hoping somebody will take a minute to fill me in on one of the basics of investing.
Let's say I call someone who wants to sell me their house (off-market). What is the process for closing the deal?
My assumption is that I need to have a contract, get it signed, do a title search, and a few other things that I'm not yet familiar with. But what else do I need to do to prepare for this eventuality?
Hi @Taft Love ,
I am in OHio, where title companies handle the closing details but It varies from state to state-- some states do title company closings and others do attorney closings. I think the first step is to figure if you are a title company state or an attorney state. then if you have a potential deal talk to either the title company or an attorney about the process. You can probably find a local board of realtors contract for your area.
I've done a grand total of one off market purchase, but then it was like @Jill F. said. The title company pretty much took it from there
I would follow this thread because I’m just starting REI and how to close off market deal is kind of my missing link too. A trick to get right answers from right people is to be specific including keywords in your question. Is it seller finance deal or lease option? Or financing using self directed IRA? You should get good answers from people who are familiar with those key words.
@Taft Love the main thing you need is a contract that protects you as the buyer and doesn't defraud the seller. I recommend downloading one for your state or getting one from your board of realtors and make copies.
I highly recommend using an attorney to do the title search and buying title insurance.
If you are getting financing, the lender will order an appraisal. If you are buying it with cash, an appraisal isn't necessary as I assume that you know how to value a property yourself.
There are no secrets, just best practices.
I know it sounds like everyone is trying to hide something from you but there are so many variables it can't be as simple as step 1 do this..... step 6 be happy you closed!.
If it was there would be a handout and everyone would own 30 houses. You are asking for a programmable list of what to do in every situation and it just can't happen. Issues can and do pop up all the time: Is there a cloud on the title? Is there a boundry line issue? Is there a tenant remaining? Is there a faulty roof? Will it pass a bank inspection? Will there be a HOA with rules? Does your area allow rentals? Is there a documented history of lead based paint? How are you purchasing the property... cash? Who owns the property? Is it in probate? is there a wholesaler involved? An agent?
The steps will vary depending on all of that information plus thousands more. If you are looking for the straightforward answer.
1) Find house to purchase
2) Agree on price
3) Write contract
4) Give contract to title company
5) Hand over certified funds receive deed.
6) Be happy you closed
@Taft Love Go back and listen to Podcast Show #77 and Podcast show #236 (in that order) - both touch on VERY important negotiating methods when sellers reach out to you for you to buy their house. Remember, first and foremost, by contacting you they've already offered to sell you their property - you just have to close.
Find out why they are selling the property and be compassionate to their situation. Find common ground with them and listen ... listen ... LISTEN - don't do most of the talking. You can work up an offer in your head but ask them for their number - "What do you need today to sell me your house?" so you do not overbid (but still pay a fair price).
Again, go back to and listen to podcast #77 and podcast #236 - very powerful negotiating tactics.
As for the logistics of actually procuring the property, most title companies have in-house Lawyers. Call the receptionist, tell her you are interested in buying a local property from a seller directly and would like to speak to a title specialist. They will talk you through the process and likely also provide you with resources for the necessary contract forms. After all, they want your business too!! Personally, I believe it is much easier than working through a Real Estate Agent.
Best of luck to you!
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