How do you cloud a title?

Question

I was reading a post and someone said that its best to cloud the title of the home you have under contract so that the buyer cannot come in and make a better deal then you with the seller, and it also causes them to deal directly with you.  So my question is how do you cloud a title to the property?

I have had this happen already, had property under contract, buyer came in and right in front of my face he started talking directly to the seller instead of me and....long story short deal lost.  What did i do wrong?

Natalie Wade · Answer

How did you come about choosing your title company over others when u started out?

Nick J. · Answer

I did a lot of phone calling and asked a lot of questions.....I got blown off a lot and had a lot of title agents  tell me, "oh ya we do that all the time" but when it came right down to it, they had no idea what they were doing......

A lot of hit and miss.

the current title company was referred to me by someone I'd met here Phoenix, who had done hundreds of transactions and said these people really know what their doing.

he was right.

I'd ask around and see who other investors are using.

Nick J. · Answer

Diane, I think that's a great question!!

I close with my title company enough to be on a 1st name basis, they know I will close with them, basically b/c they (my title company) specialize in Short sales and Sub2 transaction..............that just so happens to be my 2 favorite strategies, so you can imagine the love at first sight type of reaction when I was referred to them.

anyways, back to your question. 
My title company will do out of the box things for their investors b/c they know we'll close with them.

they provide pre-foreclosure listings, My title company will also negotiate the short sale for you, they have a HML in place for Double closes, They will call leads for me that think Sub2 investing is illegal. ( matter of fact, they are making a call to a Realtor tomorrow here in Phoenix who's been an agent for 30yrs and never heard of Sub2 investing and b/c of that "it must be illegal") :mrgreen:

they will also call other title companies for deals I do outside the state and explain to other title companies what I'm doing.

there consideration is that I actually close with them!
thats all they care about, It's not like they do these special favors for just me, but they do it for all other investors that close with them.(thats all they want, is for you to close with them)

It's late, and I've got insomnia so I hope my blabbering was of some help.....
My point is title companies can and will do a lot if you close with them.

Diane Menke · Answer

From Charles and Nick's posts can we understand that they are suggesting that a title company should be on our list of real estate investing team members? Right next to attorney, contractor and lenders for example?

Thanks for this guys. I have been to many closings but it never occurred to me to use the title companies this way. Can you share other good ways to team with title companies? What consideration do you give them when they help with docs but there is no closing with fees?

Diane Menke

Charles Whitaker · Answer

Natalie, what type of contract do you have on these properties where someone came in and bought it from under you? Also, what is the length of time that you have it under contract?

I would immediately take my contract to a title company after signing with the owner, even if I am not the end buyer. Start title work immediately so no one can undermine you.

Ryan Moore · Answer

The option contract and the notice of option that gets recorded at court house to cloud the title can be downloaded for free at [REMOVED]

Nick J. · Answer

to add to Mike's post................

You can ask  your title company to send you a copy of their 'approved' form.....

or send your form to them and have their attorney sign off on it or make the changes for you.....

not to many people know to utilize the title companies legal department to get free documents.....

Mike C · Answer

Natalie,

Have an attorney draft one or modify the one you could probably find on the internet or in an office supply store. Make sure your attorney signs off on any form you use.

After it is recorded, it clouds the title and the original seller canâ€™t get clear title or close the deal without getting your lien off the title. Your document just states you have an interest in the property. When they are closing the title search will reveal your interest in the property.

If a seller did what you mentioned in your first post, I would have laughed and said you better honor your agreement or I will take action and record something so you canâ€™t close. If they say piss off, I go to the courthouse and record my document. He now has to deal with me to close with someone else and he will be paying me an aggravation tax to release my lien. 
He will realize his mistake soon enough.

Good luck

Mike C