Title Insurance
When you purchase a home "subject to" the existing financing and go thru a closing using a attorney. Is there a problem getting title insurance? 
When you purchase a home "subject to" the existing financing and go thru a closing using a attorney. Is there a problem getting title insurance?
you usually don't get it generally speaking. You order a title search to see what is clouding the title, hopefully it's nothing but the mortgages, and you do a deed transfer so nothing else can attach from the previous seller. Then again, my question would be is what are you trying to accomplish with title insurance.
I am attempting to use the Kris Kirschners method of purchasing properties on "subject to" the existing mortgage using private lenders money to cover the closing fee's, money to seller, a little front end profit and rehab costs. As part of this program he states that you are to tell the private investor that you are getting title insurance to protect their interest. Can title insurance be aquired?[ Edited by jeb2nd on Date 01/31/2004 ]
Hi jeb2nd,
If you are using Private Money Partners, it would be up to each money partner on what they want (require) you to do.
Do to the relatively low cost, I go ahead and get a full title insurance policy for the extra "piece of mind" for my money partners. Do you really need a full policy? Probably not, just learn what makes your investors most comfortable!
Best of Success!
BAMZ
Now what if during your title search, you discover liens and judgments in amounts that will not kill the sub2 deal.
Do you deduct the amount of these encumbrances from the seller's payout once your tenant buyers refinances the property in his or her own name?
All outstanding liens, judgments, and encumbrances would have to be paid off when the tenant/buyer goes for refinancing. It would be nice to know those amounts going into this transaction..
I don't know what type of arrangement you contemplate with the previous owner. Evidentially it's some sort of payment upon the sale of the property.
If you picked up a Sub To and you are only paying his loan off, then a lien that you didnt see that has to be paid off later is going to hurt your profit.
If it is a large lien it will cause you to lose money.
IN an ideal Sub To, the guy who deeds house to you isnt expecting any future payoff. So there is no check to "dock" and you likely wont get the money back.
Always get a Title Search, even if you dont get insurance. If you arent getting a new mortgage you dont really need the insurance, but you DO need to know that the chain of title is clean so that future financing will be possible.
Good Luck,
N.
Thank you all for the good input.