Help! Questions About The Closing Process
Hello everyone,
When you purchase a property “subject to” the existing financing, what are the steps you have to take after the seller has signed the purchase contract to complete the sale? Do you meet at a title company to transfer the title/deed to the new owner or is there some other process that has to take place?
The books I have read on real estate investing are great at discussing how to get up to the point of signing the purchase contract but are vague as to what you are supposed to do afterwards to complete the transaction.
Any advice would be most appreciated.
Best regards,
Peter
There are two ways this is done - the conventional way and the other way.
Conventional - you go to an escrow house and they do the deal for you. If you want title insurance they order it for you - you dont have to have it if you are not taking out a new loan but you take a risk if you dont order it. You give them the payment and the owner signs a deed giving the property to you. When all the terms are met, they pay the owner, record the deed and it comes back to you. If you have never done this before you would be well advised to go this route - learning the process as you go.
The other way. You are enough of a real estate person to do the deal by yourself. You give the seller his cash, have him sign a deed and take the deed to the county recorder along with about $30 in recording fees - depending on where you live. If you go this route you should either consult an attorney or become expert in your states laws, since in some states you can go to jail if the owner is in foreclosure and you do certain things that take advantage of the sellers position.
As Jay rightly said, and specially since you're a newbie, have a lawyer do first deal for you with right docs., disclosures, waivers, etc...so you know it's been done right in that state.
Deeds are not something a rank beginner wants to be drafting and you'll want a lawyer to do first one for you, along with the other written docs that your manual (John Locke's course is great on this) lays out as necessary.