Posted by Irwin(CA) on May 23, 1999 at 02:23:51:
particularly when the existing lender uses payment booklets and doesn’t use monthly payment coupons.
irwin
Does anybody do their own closings? - Posted by David(Ca)
Posted by David(Ca) on May 20, 1999 at 15:36:58:
I’ve always gone through an escrow, but I am beginning to think it might not be necessary, especially when there isn’t a new loan involved.
The only issue might be getting title insurance, I’m not sure if a title co will issue a policy if no escrow is involved.
I’m not suggesting doing my own escrows when large sums of money are involved or even something a bit out of the ordinary. Only for the no-brainers where you give the seller $500 in exchange for a deed type transactions.
Maybe I’m having a break from reality here, but I though I’d run it by you guys.
Thanks, Dave.
Wade Cook and the back seat typewritter . . . - Posted by Joe Kaiser
Posted by Joe Kaiser on May 21, 1999 at 15:44:00:
Wade used to carry a typewriter in his back seat and typed up his own deeds at the sellers kitchen table. For awhile there, so did I.
Today I understand it to be a false economy and should push come to shove, you need to be able to say someone else handled the paperwork.
I can drive by a house today that I had to give back because the sellers later decided the deal wasn’t good enough and their attorney’s eyes had to light up when he saw the closing paperwork I’d created. A $75k beating.
That could have paid for a lot of escrows.
Joe
Re: Does anybody do their own closings? - Posted by lucifer
Posted by lucifer on May 21, 1999 at 06:30:28:
I now use a title company,and get title ins. I learned the hard way to get title inbsurance after the town came after me for taxes due when the bank that foreclosed did not pay the taxes before I bought it so I had to dish it out , they were only $780, for two years back taxes but it could have been protected by the $100 title ins.
Just my opinion.
Lucifer
Re: Does anybody do their own closings? - Posted by John Katitus
Posted by John Katitus on May 21, 1999 at 01:03:12:
I think the important questions are what all does a “closing” consist of and what parts of it are impossible for us to do on our own?
I bought a couple of properties subject to the existing mortgages and did most of the work myself. I paid the local title company to do a title search, which they were happy to do (they will also discount their price substantially if you tell them you are an investor and will do all your business with them). I didn’t purchase title insurance for the first properties, but subsequently was taught the foolishness in not getting insurance here on the board. Now, the title company does a title search and issues a title commitment, and after the deed is transferred into my name they issue the title owner’s policy. I also have them order a mortgage payoff statement.
Transferring title and recording the deed are fast and easy. I have the owner sign the property into trust with my company as trustee, so nobody can question why I’m doing these things.
I question what is required in closing statements. Once you know the numbers you can put one together yourself easily, of course. It would seem that once it is signed by both the buyer and seller it would be legal enough, but I don’t have any confirmation of that and anything else that might be required.
I don’t know what other hocus pocus goes on in this “escrow” thing, but I have worked with title company people that knew less about what they were doing than I did, so it probably isn’t completely beyond our comprehension. With all the great knowledge we have here, maybe somebody will give us the inside story.
Re: Does anybody do their own closings? - Posted by David Alexander
Posted by David Alexander on May 20, 1999 at 20:20:21:
I do. I do closing at my local Mail Box/postal center.
It is convenient, and there is a notary.
Mind you the deals I’m doing I’ve never put more than 1500 into. Get a title check. I believe you can still get title Insurance if you need to, depends on the title company. Always carry a contract and a Deed.
David Alexander
Re: Does anybody do their own closings? - Posted by Sue(NC)
Posted by Sue(NC) on May 20, 1999 at 18:38:10:
Like you, I think the problem is title insurance.
I’ve done several deals with no formal closing, and no title insurance:
Getting a deed from my parents
Buying a home in foreclosure for homeowners dues, which
I was immediately selling back to the former owner.
Buying property with a TOTAL price less than 1K (adjust
to your own tolerance level)
Even if I were only paying $500 to the seller, if the property value were greater than a few thousand, I would want the title search and insurance. For instance…
What are you going to do with the property?
Sell it? Around here, Most buyers (with their agents) aren’t going to take a quit claim deed. What if you contract to sell the property and there is a title cloud? Your buyers would probably not be happy. I like to know when I offer to sell the property that there will not be any problems.
Keep it for a few years? I would hate to lose the equity that I had built up over a couple of years due to a title problem that could have been insured against when I purchased. Even if you know how to do title searches, you cannot tell if signatures were forged.
If you are going to rehab, you’ll have a lot more into the property than $500. Even if you do not, you’ll have your time invested.
So I would bite the bullet, spend the $ on the closing & insurance. Even in the case where I get a deed for $500 (subject to existing financing).
We agree about the title insurance … - Posted by David(Ca)
Posted by David(Ca) on May 21, 1999 at 17:23:02:
but man, you don’t live in southern california, I have NEVER heard of a $100 title insurance policy.
Re: Does anybody do their own closings? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on May 21, 1999 at 19:05:41:
I’m interested in your statement, as follows:
"I have the owner sign the property into trust with my company as trustee, so nobody can question why I’m doing these things.
I don’t recall hearing about this use of one’s Company as trustee in a land trust. I’ve heard of using your company as beneficiary.
Who do you use as beneficiary in this case? Could you explain a little about the hows and whys of your method? Sounds interesting.
Thanks-
Stacy
Re: Does anybody do their own closings? - Posted by David(Ca)
Posted by David(Ca) on May 21, 1999 at 17:12:29:
John:
I think I could handle a simple closing myself, there isn’t any real magic. I just got a little tweeked last time, when I bought “subject to” and ended up paying over $1000 (I paid both the buyer and sellers side) for the escrow. All they did was draw a deed, record a deed, give the buyer a little money and make a closing statement.
From your post it sounds like title companies ARE willing to issue a policy even if there isn’t a closing agent. Hmmmm, interesting, maybe I can do this.
Not sure why you have them order a mortgage payoff statement if your not paying off the loan?
I don’t think a closing statement is required unless a closing agent is involved, what they call a HUD-1.
Re: Does anybody do their own closings? - Posted by David(Ca)
Posted by David(Ca) on May 21, 1999 at 16:13:49:
Dave:
I guess if you don’t have much into the deal you don’t have much to lose, but there could be a title problem that doesn’t show on the preliminary title report that you would be covered for if you had bought the policy. Certain types of policies cover problems “not of record”, ALTA policy I think, like a boundry dispute.
Thanks, Dave
Re: Does anybody do their own closings? - Posted by David(Ca)
Posted by David(Ca) on May 21, 1999 at 16:03:43:
Sue:
I agree with you, I would always get title insurance.
I was just wondering if there was a way to get insurance if I did the closing from my home office.
Thanks for the input, Dave
Re: Does anybody do their own closings? - Posted by John Katitus
Posted by John Katitus on May 22, 1999 at 02:33:42:
Hi Stacy, After thrashing the Land Trust Trustee/Beneficiary subject repeatedly, the general concensus was that a corporation was a very good choice as Trustee and an LLC as beneficiary. Please email me if you would like details. John
Re: Does anybody do their own closings? - Posted by Brad Crouch
Posted by Brad Crouch on May 21, 1999 at 22:51:45:
Stacy,
The corporate trustee does not die.
Brad
Re: Does anybody do their own closings? - Posted by John Katitus
Posted by John Katitus on May 22, 1999 at 02:55:22:
I’m with you. I suspect that “escrow” is just another word for “processing.” Most people that only buy and sell a house or two in their lives don’t mind paying it, but I am not yet at the point that I won’t spend an hour to save that money.
Yes, I believe they are more than happy to issue title insurance without escrow. They undoubtedly make a profit on that, too. One aside - my title company hits me $50 for a title commitment that stands until the deed is in my name. I am not sure they charge that if they do the escrow.
My concern with a mortgage payoff statement is in reporting the sale to the IRS. A sale, where the property is put into Land Trust and the Beneficial Interest Assigned, becomes a sale at the date of the assignment (more CRE board wisdom). In THEORY, that’s when the transfer of ownership occurs, and (I think) when the sale should be reported as having occurred. Again, in theory. Since the assignment is private, nobody will ever really know when it happened, which brings up more questions about closing statements.
If they get the payoff statement, I can prepare a closing statement using their third-party number. I would then get the seller to sign it and give him a copy for tax reporting. I don’t think the title company is charging for getting it, or I will order it myself.
Re: Does anybody do their own closings? - Posted by JPiper
Posted by JPiper on May 22, 1999 at 01:23:29:
The title companies I do business with won’t issue a policy unless they prepare the deed. I can’t figure out why you’re trying to save a few bucks for closing fees. The major fees are title insurance, and perhaps some of the prorations…which would be paid regardless.
JPiper
Re: Obviously, I missed it. - Posted by Stacy (AZ)
Posted by Stacy (AZ) on May 23, 1999 at 02:26:02:
John (and Brad)-
It appears obvious to me from the above discussions about Land Trusts that I missed the prior posts regarding using a Corp as the trustee and LLC or LLP as beneficiary. I won’t ask you to rehash it for me, I’ll go to the archives and look for it.
I know the frustration of having someone ask a question that has been previously answered (sometimes repeatedly). No problem.
Stacy
Re: Does anybody do their own closings? - Posted by Stacy (AZ)
Posted by Stacy (AZ) on May 21, 1999 at 23:38:21:
Hi Brad-
Why is this an issue? Why not just assign a successor trustee upon the trustee’s death?
Also, who is the beneficiary?
I’d just like to understand this strategy…may be something I’d like to use if I understood the reasons.
Thanks in advance-
Stacy
I’ts more likely to get hit by lightning… - Posted by David(Ca)
Posted by David(Ca) on May 22, 1999 at 10:32:03:
but I wouldn’t want to alert the lender to a possible title transfer by ordering a payoff demand, and thereby triggering DOS. Why not just get the “numbers” from the monthly loan statement.
Dave
Sometimes it’s easier to do things yourself. - Posted by David(Ca)
Posted by David(Ca) on May 22, 1999 at 10:21:44:
Yes, I’m thinking of the money, but that’s not the whole story.
Sometimes it takes more time and energy to get escrow to do what needs to be done than is to do it myself, especially if all I have to do is get a deed and hand over a check. Like the other day I installed a flush valve myself for a tenant, which I detest and usually have those kind of things by somebody else, it turned out to be EASIER than getting hold of a handyman.
However, I think Joe Kaiser has come up with the best reason for having a third party do the paperwork in his post above.
Dave