Help !!!!!
I am about to close on a wholesale deal (im assigning the contract), but ran into a little snag. The owner had told me that the title was clear....but when I called him today to schedule the closing, he told me that he did still owe some money to a credit union. When I asked him how much his response was "A couple thousand dollars". I will call his wife later on tonight (she is easier to deal with) and find out exactly how much. But, my question is, how do I deal with this? I would like to close this deal next week (as would my investor), but how do I go about getting the title clear??? He wants us to bring 2 seperate checks...one for him, and one for the bank...but, I dont see how that would work....because the bank would have to sign off that its been paid, correct? Can I get in contact with his bank, and arrange for one of their reps to be there?? Or is the only way for him to pay this off before we go to closing....?Any help would be greatly appreciated!!!! Thanks in advance!
I would think that standard operating procedure would have been to have the title searched by a title company before you get to the point of assigning. Without knowing the total amount of liens against the property, you would not know if clear title could be conveyed to anyone.
Yes, I know that is standard procedure...but I am new to this, and did not do that. Obviously now, knowing what I do I would do that next time. Unfortunately, Im trying to get any suggestions, or answers that will help me THIS time. I also had asked the guy, and his answer was a clear "yes" on the clear title...should I have believed him? Obviously not...but, you learn with every mistake.
Some title compainies will perform services pertinent to the closing process (including title search) without upfront cash. They'll just deduct their fees from the proceeds of the party responsible for paying closing costs.
My advice would be to find a company that operates like this and begin the process the day you take control of a property.
Regardless of whether you assign or retail yourself, that all neds to be done anyway, so it's best to get it done before you find an investor. This way you have all the info you need before you talk to investors. It'll save you some face.
The situation you're in isn't impossible to resolve. Talk to the investor and see what he wants to do. Either way, he'll need to know what's going on with the title. Shame on that seller for misleading you. Hope you get everything settled. Nothing like that first deal to really get you excited for number 2!
By the way, just curious... what are the numbers involved? Property buy/sell prices and your assignment fee?
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On 2004-02-04 18:34, nate124 wrote:
Yes, I know that is standard procedure...but I am new to this, and did not do that. Obviously now, knowing what I do I would do that next time. Unfortunately, Im trying to get any suggestions, or answers that will help me THIS time. I also had asked the guy, and his answer was a clear "yes" on the clear title...should I have believed him? Obviously not...but, you learn with every mistake.
The only way to know about getting clear title, at least in PA, is to get a title bring down which is done by a title company after searching the title for recorded liens and encumbrances. (Which is why I suggested that in my prior post.) Anything short of that isn't going to achieve that bottom line.
Unless I misunderstood, at this point, since you don't know what the liens total on this property, you don't even know if the purchase price will be sufficient to satisfy (clear off) all the current liens against the property.
I am doing my best to learn from this....I understand my mistakes...you do not have to point them out to me.
How else do you learn this business...? You have to take chances and try things out. Thats exactly what I am doing. I appreciate your post, although it did not help me. Thanks anyways.
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On 2004-02-04 20:01, nate124 wrote:
I am doing my best to learn from this....I understand my mistakes...you do not have to point them out to me.
How else do you learn this business...? You have to take chances and try things out. Thats exactly what I am doing. I appreciate your post, although it did not help me. Thanks anyways.
You don't sound very appreciative, Nate. Responses like the one above aren't going to get you very many people willing to help. Take the advice, be grateful someone took the time to consider your problem and type a response, say thank you and move on.
Quote:
On 2004-02-04 20:01, nate124 wrote:
I am doing my best to learn from this....I understand my mistakes...you do not have to point them out to me.
How else do you learn this business...? You have to take chances and try things out. Thats exactly what I am doing. I appreciate your post, although it did not help me. Thanks anyways.
Nate,
You want to be able to get clear title so that you can flip the property.
In order to get clear title, you have to know the total $ amount for the liens against the property.
Unless the purchase/flip price is more than the total $ amount of the liens recorded against the property, nobody (you, flippee, whoever) will get clear title to the property.
In order to know the total $ amount of liens, you will have to have a title search done.
That is how you will find out if clear title can be conveyed.
Get a title search done. Apparently, that's not what you want to hear, but that's what has to be done.
The first document you get the homeowner to sign is "Authorization to release information" allowing you to freely speak to the bank and other pertinent creditors in regards to all the loans he/she owes. Did you do that? The next thing you do if you are going to pay in cash is to do the title search for clouds and liens. As Nancy sad, this is a pretty standard procedure and is not difficult at all to be done.