If I have a property I want to wholesale, who performs the title search? Aside from that, after I get a property under contract what due dilligence should I be performing?
Well, I have seen this done a number of ways. If I suspect that there is title trouble I might take an afternoon, run down to the courthouse and run a title search myself. But I very rarely do this and would do so only in response to some actual suspicion.
Most of the time I let the title insurance company do the title search, after all that's what they get paid for.
Most of your due dilligence should be done before you get a property under contract. As to what DD you should do that depends a great deal on what kind of properties you are trying to deal in. The DD for a gas station (all sorts of environmental problems) is a lot different for than that for a single family home. Ultimately the answer here, assuming you are planning to flip this to a rehabber (as your title suggests) is that the buyer will let you know the answer to this question by asking you about what he is worried about. Never be afraid to say, "I don't know about that, I will check and get back to you."
Thanks for the replies. So I take it ultimately it's not necessary to order a title search as a wholesaler. You mentioned title insurance, do rehabbers take out title insurance when they buy the property from you? I wasn't sure on that, since the rehabber was only going to hold onto the property until it was fixed up.
I think you may have misunderstood some of the above posts. Before you try to assign your contract to anybody else, you should have the title checked by a title company. This does not mean that you are paying for title insurance. It means that you are asking the title company to verify who owns the property, what (if any) liens there are against it, and anything else that may have been recorded against the property. The reason you should do this, as part of your due diligence, is you don't want to spin your wheels trying to wholesale the property until you know that there's no problem with title and related issues. Ultimately, your buyer (the person who closes with the seller) would be paying for the title insurance. You should check with some local title companies and find out what their charges would be just to do title searches for you, not for the cost of title insurance.
As commercialking said, your due diligence is going to depend on the type of property and what your buyer intends to do with it.[ Edited by NancyChadwick on Date 04/07/2004 ]
Well, I have seen this done a number of ways. If I suspect that there is title trouble I might take an afternoon, run down to the courthouse and run a title search myself. But I very rarely do this and would do so only in response to some actual suspicion.
Most of the time I let the title insurance company do the title search, after all that's what they get paid for.
Most of your due dilligence should be done before you get a property under contract. As to what DD you should do that depends a great deal on what kind of properties you are trying to deal in. The DD for a gas station (all sorts of environmental problems) is a lot different for than that for a single family home. Ultimately the answer here, assuming you are planning to flip this to a rehabber (as your title suggests) is that the buyer will let you know the answer to this question by asking you about what he is worried about. Never be afraid to say, "I don't know about that, I will check and get back to you."
I prefer to let the title company do the title search before putting a house under contract.
Thanks for the replies. So I take it ultimately it's not necessary to order a title search as a wholesaler. You mentioned title insurance, do rehabbers take out title insurance when they buy the property from you? I wasn't sure on that, since the rehabber was only going to hold onto the property until it was fixed up.
Thanks again.
I think you may have misunderstood some of the above posts. Before you try to assign your contract to anybody else, you should have the title checked by a title company. This does not mean that you are paying for title insurance. It means that you are asking the title company to verify who owns the property, what (if any) liens there are against it, and anything else that may have been recorded against the property. The reason you should do this, as part of your due diligence, is you don't want to spin your wheels trying to wholesale the property until you know that there's no problem with title and related issues. Ultimately, your buyer (the person who closes with the seller) would be paying for the title insurance. You should check with some local title companies and find out what their charges would be just to do title searches for you, not for the cost of title insurance.
As commercialking said, your due diligence is going to depend on the type of property and what your buyer intends to do with it.[ Edited by NancyChadwick on Date 04/07/2004 ]