On today’s episode of the Forever Cash Life Real Estate Podcast, we’re going to talk about how to deal with title companies.
Over the past few weeks, I have dealt with four different title companies. My experience has been mixed, with two performing very well and two that left much to be desired. In this episode, I’ll share some insights into working with a competent title company and dealing with a title company that is failing to do its job.
What is a Title Company?
A title company’s role in a real estate deal is to verify that the title to the real estate is legitimate. Title companies are mandated to verify that seller has the legal right to sell the property.
A title company’s job is to:
- Make sure there are no title issues.
- Ensure that whoever signs for the sale of the property is truly authorized and the rightful owner on the deed.
Why dealing with a title company can be difficult
We are currently seeing a massive boom in the real estate market.
This is because:
- Interest rates are at a record low.
- Homeowners are refinancing to take advantage of the market conditions
- The global move to a work from home model is motivating people to relocate
The result is that many title companies are under a lot of pressure due to capacity constraints. In my experience, some title companies are stepping up to the plate and some are failing to cope.
What Happens When a Title Company Doesn’t Do Its Job
When you’re in the land flipping space, the title company is an essential entity. They can make your land deal go smoothly or do the exact opposite.
In the past few weeks, we’ve done five deals and dealt with four different title companies. Two of the title companies were absolutely fantastic, and two left much to be desired.
We sent them the signed contract for one of the deals with a weaker title company, and they started doing the title search. A week went by, then two, then four. Seven weeks later, we finally got the preliminary title report.
A son and daughter inherited the property from their father, who had put it in a family trust and made the son and daughter trustees. This isn’t difficult to solve. You need the estate documents, the trust documents, and their information. A decent title company should be able to get this done in two days. It took this title company another eight weeks.
What a Competent Title Company Will Do For You
During the same time, I bought a property for $90k and sold it for $199k. That deal involved multiple LLCs and a family trust. This time the title search took three days, as it should. The title agent for this deal needed more documentation, and I got it all for her. She was thrilled. She sent out closing documents 2 days later, and we closed in 12 days total.
How to deal with a weak title company
If you’re unfortunate enough to be stuck with an incompetent title company, you’ll have to jump in and help them do their work. I left a voicemail, then sent multiple follow-up emails every day. They kept dragging their feet. I know the squeaky wheel gets the oil, so I made some noise.
Title searches are taking longer these days, even with competent title companies. They might have 25-50 deals on the docket, and they’re prioritizing the ones that make them the most money. If yours isn’t a million-dollar deal, you can move up the list by making noise. Basically, you commit to being a bother until they give you what you want.
Remind them that if interest rates go up even a little, refinancing deals will stop cold. If you’re dealing with a reasonable title company, they will value your relationship and take a long-term view.
- How to deal with a title company to ensure a positive outcome
- Setting expectations when it comes to title companies
- When to intervene with a title company that is not performing well
If you are ready to turbo-charge your land investing business, join me for our upcoming 3-Day Virtual Land Flipping Bootcamp. I will, personally, be teaching all of the techniques and systems needed to build and scale your land flipping business to start producing the 6 and7-figure land deals that will change your life.
When: June 25th – 27th
Where: LIVE on private ZOOM Classroom
Book your Ticket: www.landflippinglive.com