Denton, TX · Member since 2012 · 40 posts · 12 votes
When you flip a house as an investor, put it on the market and find a buyer. Who determines the Title company that will be utilized, is it typically the buyer or the seller?
Can the buyer set a preference for the title company they would like to work with?
I ask because I have a good friend who is an escrow officer, and whenever I flip my first home I would love to use her services.
Why? In both cases, I want to be in control. The wrong title company can mess up your deal (specially if you're doing a creative transaction or not the typical transaction). It happened to me before so I always want to be in control.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
12y
Title and escrow are two different things entirely. That said, the seller "typically" chooses the title company and the escrow company or closing agent, but everything is negotiable. It is also typical that if a buyer demands to choose the title company or escrow, then they pay for it. It is also typical that seller pay for title and buyer and seller pay there own portion of escrow fees.
When you flip a home, whomever you buy from will likely choose the title company and you should purchase an owner's title binder from that company and use that same company on your flip. This will cut your back-end title costs in more than half and the upfront fee for the binder is small.
Rental Property Investor · Bend, OR · Member since 2013 · 81 posts · 24 votes
12y
As James said it is negotiable, but at least here in Oregon the buyer usually chooses the title and escrow company. It is written up in the sales agreement. Sometimes sellers will ask that a certain company is used, or in the case of REOs then the bank will usually insist that a certain company be used.
Why? In both cases, I want to be in control. The wrong title company can mess up your deal (specially if you're doing a creative transaction or not the typical transaction). It happened to me before so I always want to be in control.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
This might vary based on your location. In my area, the buyer typically chooses - although the seller can make stipulations on the title company to be used.
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
12y
An example of when it would have helped me as a seller to pick.
A few years ago buyer picked title company for the closing. Scheduled for 9AM eastern time, in January on a day that turned out to be snowy and icy. Get there and start going through the various paperwork, only to find that the lender was on the west coast and no wire was going to happen before noon.
Title and escrow are two different things entirely. That said, the seller "typically" chooses the title company and the escrow company or closing agent, but everything is negotiable. It is also typical that if a buyer demands to choose the title company or escrow, then they pay for it. It is also typical that seller pay for title and buyer and seller pay there own portion of escrow fees.
When you flip a home, whomever you buy from will likely choose the title company and you should purchase an owner's title binder from that company and use that same company on your flip. This will cut your back-end title costs in more than half and the upfront fee for the binder is small.
Aside from it all being negotiable, there is what is customary. In Nor Cal, the buyer pays title. Which makes no sense to me, but that's the way they do it there.
When you flip a house as an investor, put it on the market and find a buyer. Who determines the Title company that will be utilized, is it typically the buyer or the seller?
Can the buyer set a preference for the title company they would like to work with?
I ask because I have a good friend who is an escrow officer, and whenever I flip my first home I would love to use her services.
Curtis: call her and ask her what is customary for your area. If you have a friend that knows escrow, learn from her! My escrow officer is an invaluable part of my team. And they are also good for networking and leads.
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
12y
There is a strong incentive for a flipper to choose the title company - title insurance. When you buy a property to flip, request the title company that issues the title insurance for your purchase do a "hold open" on the policy. Then, if you use that same company when you sell, you can update the policy and only pay an incremental fee for the value that's been added. This will save money vs. buying a new title policy from scratch. I don't know for a fact, but I suspect that's one reason banks always insist on choosing the title company if you want them to pay for title insurance.
Investor · Boise, ID · Member since 2011 · 1k+ posts · 736 votes
12y
In Idaho, the title company used is buyer's choice. I'm with @JOAN DICKIE - each area has it's nuances, so check with the title company or your local real estate commission.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
The reason a bank with REO will dictate title search is because it's already been done.
A buyer is free to obtain a title policy from any source, even in Cali. The issue is that if it's customary that the buyer pays for the search, you'd have to do a search for settlement and another by your title coverage company for your policy.
Regardless of local custom, if you stipulate in your contract who will pay for what and where closing will be conducted, that can be agreed to.
As a buyer, I should be aware of local custom and any listing requirements before I make any offer. As a seller you can put the preference in the listing.
So long as it's an insured closing (the settlement is insured by an insured settlement agent's letter from the title company) I'd close with anyone.
Another point, you might get a settlement agent to take one party first or line up documents in a certain way, but I'd not say that is "controlling" anything, that's simply working with the settlement agent. Settlement agents are in a trustee type position, you don't "control" what is to be accomplished.
Usually preference will be given to "lender's instructions", then to seller's requests then to buyer's request (buyer and seller can be flipped to the whim of that office). If the deal doesn't close as a lender may require it doesn't get funded, if the seller throws a fit, they may not close and to get damages from a seller will generally require a law suit, if a buyer doesn't close they have money on deposit that they may lose. So, in a way, who "controls" settlement is a bit tied to the influence they hold in the closing.
If you don't work regularly with a settlement agent, provide a closing letter outlining how you want your side accomplished. Better know what you're doing as if you make a mistake they may follow the instruction without liability. :)