By William Bronchick & Frank Pulley
To be a successful real estate investor you need a great team of people surrounding you. One of the key team members that are often overlooked, especially for the newer investor, is a good title company that understands the particular needs of the real estate
A good investor title company can help you close deals, legally and ethically that other title companies might not be willing to undertake. Although all title companies are bound by federal, state and local laws, foreclosure protection laws and more, each title company has some flexibility to choose what types of transactions they are willing to undertake. Unfortunately for many investors, closings that are a little bit “outside the box”, such as installment land contracts, simultaneous closings, and closings involving owner financing may not be handled by your typical title company. And even if they choose to handle that those types of transactions, some may not do a very good job of it.
Picking the right title company to work with your business along with a trusted advisor or mentor is paramount in your ability to close profitable deals. Here are 7 Tips in order to help you pick the right title company for your real estate investing needs.
1. Ask Around. The best source for finding other team members is to ask other investors and some of your current team members who they might recommend. In most markets, there are usually a lot of different title companies to choose from.Asking for referrals from people that you know and trust is a good way to thin down the list.
2. Interview Title Companies. Now that you have a list of title companies to interview, start making some phone calls. It’s probably not necessary to make a personal visit just yet. Just because a title company works well with another investor or team member that you know doesn’t necessarily mean they’re going to be a good match for you. Your investing style, personality and the types of transactions that you undertake may be different than other investors and it’s important to find out if the title company you’re considering meets your specific business needs.
3. Find Out What Services They Offer. Although most title companies do pretty much the same thing, many will also offer marketing assistance and other types of help in order to help you gain more business – and thus close more deals. Naturally, they hope that you will be using their services! In addition, many title companies hold or sponsor continuing education types of courses to help you further your knowledge and give you a chance to network with other like-minded individuals.
4. Be Upfront About Your Specific Investor Needs. Be upfront from the very beginning. Let the title company know that you are an investor and the specific types of deals that you are working. Don’t hide anything. It’s much better to find out that the title company won’t be able to close your types of deals right from the start rather than starting the deal with a title company and then having to switch title companies in the middle of the transaction. This could most certainly delay, and could possibly kill the deal entirely.
5. Do They Have Attorneys on Staff? Most title companies have a legal department and one or more attorneys that they can refer you to if needed. Please note that this is not a substitute for the real estate attorney that you have part of your team. Title company attorneys might be able to give you suggestions on how to handle a particular lien or situation, but you will want your own attorney to interpret tricky contracts and other types of deals. However, a title company that has an attorney on staff can be helpful especially if you have a quick question on a specific part of a deal.
6. Make a Personal Visit. Once you’ve narrowed your list of potential title companies down to one or two, then it’s time to make a personal visit. You will want to meet at the very least, the people in charge of the closing representatives, marketing and legal. Try to meet some of the closers as well.
7. Get a Personal Rep. It’s helpful to have a personal rep at a title company that you can go to and they can either answer your question or send you to the right person or department within the company. We can tell you from experience that once you find the right person, especially a good transaction closer you will likely stay with them for a long, long time.
So now you have it. Whether you are a novice investor looking for a title company or an experienced investor looking to make a change, we sincerely hope that you find these tips helpful. Best of luck in your search. Here’s to your success!