Posted by Bill K. - FL on February 26, 2000 at 18:29:39:
Hi Gary,
Yes, you definitely want to handle this as any other deal except the owner is taking back a note from you instead or you paying cash or otherwise. You want to get title insurance, and if the owner is smart, he will record the mortgage to protect his interest. Most title companies will prepare the necessary documents, probably for an extra fee.
Title insurance with owner financing? - Posted by Gary
Posted by Gary on February 25, 2000 at 20:33:40:
Newbie needs advise here…
I’m through making cash offers on a fixer upper house and plan to take the owner financing route on the next offer.
But in this case, do you go through a title company to have a title search and purchase title? How is this captured?
If not, how do I make sure the owner financing gets documented at the county Recorders office?
Yes - Always - Title Insurance with Owner Financing - Posted by Judy Miller - American Note
Posted by Judy Miller - American Note on February 27, 2000 at 20:42:15:
Always, when you purchase a property, get title insurance! Even if you are getting a “good deal” and title insurance is not provided to you by the seller, please, GO GET IT! Make sure your title, the money you are investing, is marketable. You cannot sell that property if title isn’t clean. Can you imagine spending cash to purchase the property, and lots of hard-earned money to fix it up, then, upon your attempt to sell the property, or the note created, you find out that you don’t have clear title. This is a serious WHOOPS!
if you are creating a seller-financed note, whether or not you received title insurance when you PURCHASED the property, you are definitely going to have to provide title insurance if you are going to sell the note at escrow. If, however, you are selling a seasoned note, then usually the note investor will pay for the title. However, if they learn that no title insurance was obtained at your purchase, this may become a negotiable issue. In the midwest and other places, often there has been no title work done for many years and transfers, and the title officer or attorney has to work from an abstract, a very antiquated and slow way to check the chain of title. Be safe, get it when you purchase to protect yourself.
As for selling your note, you may not need to give title insurance, but title insurance, or proof of clear title, for the note purchaser, is MANDATORY.
Best Wishes,
Judy Miller - President
American Note
Several Types to consider Re: Title insurance with owner financing? - Posted by Michael Morrongiello
Posted by Michael Morrongiello on February 27, 2000 at 10:04:46:
When purchasing property from a private seller if you have concerns over being conveyed “marketable title” you should negotiate the expense into the deal for what is known as an OWNER title insurance policy. This type of policy will insure that good title is being conveyed to you as the buyer. It is customary in most marketplaces for this to be a sellers expense althought that is completely negotiable.
IF you are SELLING a property where owner financing is involved and you are to take back the mortgage then consider what is known as a LENDERS or MORTGAGEE title insurance policy that will insure the validity of the lien against the property being financed.
Note: A Lenders policy premium is nominal if it is issued at the same time that owners coverage is also being wriitten.
Remember title insurance can be expensive and it does not always protect you from problems associated with title. However it is a tool to hedge your bet.
Michael Morrongiello