Posted by Steve (CA) on July 30, 2001 at 23:31:43:
I’m in Silicon Valley and have dealing with these same issues. Have you found an attorney that will perform double closes? What verbage have you decided to use with buyers and sellers? Has Alliance title proven to be the most amenable to creative deals?
-Steve
Double Escrows / Simo Closes in Calif.- HELP!! - Posted by David
Posted by David on January 30, 2001 at 13:39:31:
Hello to all. I need some advice. In the process of working with Chicago Title company in northern calif.
Very nice people. They are very happy to assist me in my wholesale home closings the way that Ron Legrand teaches in his courses.
The only thing that appears to be different is this: they informed me that they would have to disclose to my seller that the property is being sold for a possible profit and that the funds to close the first transaction are being derived from the “resale escrow” transaction.
Then they would disclose to my buyer and or lender if one is involved that the property is being subsequently sold for a possible profit and that the funds to close the first transaction are being derived from this resale transaction with either new lender financing. In the event there is no new financing, the disclosure should still be executed by the seller and buyer.
This is what they are set on doing. My question is this,
are any of you running into this situation? If so, how have you dealt with it? Also, what kind of negitive impact will it have on my deals with my seller and buyer? The title company does not seem to back off from this. They are intent on protecting themselves legally. this is what i am told.
I have called several other and none seem as cooperative as Chicago Title in all other aspects. This is The only possible negative I see at this time with them. otherwise they will do everything that Ron legrand says to have them do for my wholesale and flipping deals.
Thank you for your help and guidence.
Warmest Regards,
David Quon
Re: Double Escrows / Simo Closes in Calif.- HELP!! - Posted by BillW.
Posted by BillW. on January 30, 2001 at 22:47:17:
David, If this is what the title company is intent on doing, you’re probably not going to be able to get them to change their mind. Have you tried to get your attorney to do the closing? In many areas, attorneys can and do routinely handle closings. Also, in some areas, real estate brokers do the closings as well. If there is no way around this situation then do a preemptive strike and tell the buyers FIRST, before they read this stuff from the title company. You might make up your own “notice to buyer” form that says you are an investor and that they understand they are buying from an investor and that you have the expectation of making a profit on the deal, that you are using their funds to complete the transaction, etc. Have them sign before you get to the closing table and explain this to them. Then when they see it again, they won’t freak out and refuse to close. In many parts of the country, some people are equating real estate investing with ripoff scams. This is unfortunate, but some unscrouplous people have taken advantage of not only the system but of unsophisticated buyers and done what they are accused of doing. It usully involves rapidly inflated prices, phony appraisals, and out of the area lenders. Often it includes phony information given to the lenders as to the true details of the borrowers situation, cash on hand, wages, and so on. To protect themselves from being named in the lawsuits, the title companies have instituted these new requirements. As to those of us who are honest, as long as we can back up what we say a property is worth, we have little to fear.
BillW.
Re: Double Escrows / Simo Closes in Calif.- HELP!! - Posted by David
Posted by David on January 31, 2001 at 12:50:11:
Hi Bill,
Sorry, I did not mean to call you George. I meant to say, " thank you for your help Bill"
David
Re: Double Escrows / Simo Closes in Calif.- HELP!! - Posted by David
Posted by David on January 31, 2001 at 12:47:47:
Hi Bill,
Thank you for your response. You are so correct. I have contacted EVERY title company and they all use the disclosures to my sellers and my buyers. They stated that they are protecting themselves from lawsuits!!!
Other than that, some charge more than others and some insist that I also have a title policy for 1 to 5 minutes of ownership when wholesaling a property. I did make one final call to the last title company on my list, Alliance Title. They were very cooperative.
No fees for title search, title policy only for my buyer, then the typical escrow fees and closing costs.
They will still have disclosures for my seller and buyer though, disclosing to seller and buyer that I will be using my buyers funds to pay for and close the deal with my seller. Unlike all the other title companies I contacted they will not be disclosing to my seller and buyer that I will have a possible profit.
I tell my sellers & buyers up front that I am an investor and I need to make a profit to get involved.
I think that your idea of having it in writing is a good idea.
My question is: why would they freak out if they knew I was using there funds to complete the transaction? Also, do you think it would bother them to know that I am making a profit? I may not have any choice since the all the title companies are using these disclosures.
I will talk to my attorney though George. Thank you for your help.
Wamrest Regards,
David