Quick question for anyone out there that can help me out with understanding the closing process. I'm currently trying to break into buying/selling land (raw parcels). I'm currently researching the closing process and would love any insight anyone has about the process. My plan is to start out buying smaller parcels and would therefore like to keep my costs as low as possible to start. When I finally find a plot, make an offer, and agree on a buying price with the seller how do I continue with the closing process? Do I NEED to hire an attorney or can I simply complete the process through a title company. I apologize if this question is a little too "basic", I'm a newbie so feel free to share ANY info, all responses are appreciated!
In addition I should mention I'll only be dealing with cash. I do not plan on financing any purchases I make. Thanks again
You will be able to use a title company to complete the closing process for you.
1. Become very familiar with contracts for unimproved property. It's difficult to negotiate with a seasoned investor or savvy seller if you're not clear on how to structure a contract to your benefit.
2. Become very familiar with your preferred title company's closing documents. Title companies do not represent you...they represent the title company and they have very sharp attorneys who are well versed in placing liability on others (buyers and sellers) via their closing documents.
3. Determine if you wish to learn fast and right or slow and wrong. The latter is what typically happens when new investors "jump right in with both feet" before they realize how deep the water is. In other words, jumping in without the guidance of a seasoned investor is seldom a smart thing. I can give you too many examples of new investors who "thought" they were ready and they lost a ton of money.
Now, to answer you question. Once under contract, you will presumably deliver the contract to the title company so they can begin their process of researching the chain of title. If you have a loan, your lender should also get a copy of the contract so they can begin processing the loan. If all goes as planned, both lender (if any) and title company will complete their work timely and the closing will take place.
Of course this is a very simplified version of the process...there are plenty of potential pitfalls which is why hooking up with a seasoned, active investor and sharing the profits on your deals (until you're well versed in the process and documents) can be worth its weight in gold.
@James Wise thank you
@Guy Gimenez thanks for the info, I am certainly the type that will do deligent research before jumping in. In terms of finding a good title company to work with what would you suggest. I would assume like anything else in this world there are both good and bad companies out there. Thanks again
When I'm changing title companies, I just email them and ask for their standard closing document package for both buyer and seller side. Then I review and make changes to the documents and have the escrow officer or fee attorney send the changes to their legal counsel. If the T.C.'s legal counsel accepts the changes, then I visit with the escrow officer / fee attorney about our respective expectations.
Good documents and good service is harder to find than most would think, but they can be found.
@Guy Gimenez thank you again for the info!
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