Posted by Stacy (AZ) on December 30, 1998 at 21:27:41:
You really shouldn’t assume your investors can close in 30 days unless you’ve worked with them in the past. (sorry- gotta type quick, my girlfriend is waiting to get out and listen to some live blues…)
Best to check-out your investors, even though your contract states your risk is limited to your earnest money. Can they provide you any proof of funds?
I would do three things with the title search-
First, I would make sure the contract is contingent on clear title,
Second, I would either do a prelim. title search myself, or ask a title company to do one if I didn’t have access to the records. Only on the properties you know you can get at a decent flip price.
third, I would be sure to get title insurance…you will probably split the cost, as stated in your contract, but if you assign it, your investor friend will pay…Jeez she’s yelling at me! Gotta go…
? for Jackie in Dallas, Stacy(AZ), SCook85, etc - Posted by Sonia(VA)
Posted by Sonia(VA) on December 30, 1998 at 20:03:09:
When questioning the seller about how much they would take for their home for all cash and a quick closing(30days), is it safe to assume that my potential investors can all close within the 30 day time limit? I’ve called a few “I buy Houses” ads, talked with the investors, and all three told me that they buy in all areas, they would not be specific about price, and told me they would be all cash buyers.
I am trying to limit my risks, and I keep questioning you guys about the specifics of the purchase contract. Thanks for you patience!!
Also, can I do the title search myself? I’ve called about 5 title companies in my area, they all said costs would be $50 to $100 per search! Steep, don’t you think?
Sonia
? for Jackie in Dallas, Stacy(AZ), SCook85, etc - Posted by SCook85
Posted by SCook85 on January 01, 1999 at 02:45:30:
Sonia,
If your deal is good enough and you have a REAL all cash buyer they can settle very quickly. The problem that I have run into is when I have someone who claims that they can pay cash (like myself) and can’t really do so (like myself) they have to go and get financing. In my area of the country it is very difficult to finance fixer uppers right now. Before I assign a contract to someone, I make sure they either have the cash or are qualified to buy. I know where they can get the money to buy my properties and send them in the right direction, I don’t leave it up to them. I have them approved for the loan before I assign the deal.
As far as 30 days go, if I am negotiating with someone and they take a week to decide I come back and tell them that I just bought a few properties in the last week and in order to buy theirs I am going to need more time and I ask for 45-60 days. It has worked everytime so far. Also, if you can’t settle in 30 days, you can go beyond that. The seller technically can not sell to anyone else until you sign a release. Worst case you could record your contract. If you can prove that the deal will settle, the seller has no choice but to give you a reasonable amount of time to settle. This is true in the state of MD. I don’t know where you are located and it may be different there so look into it.
I haven’t had a problem with this anyway. I have had 4 reluctant sellers and 2 easy going sellers extend settlements for me by as much as 16 days. Never was I threatened with law suits or the loss of my deposit. But I was right up front with all of them.
In Baltimore there is a back up at city hall to get lien sheets. It takes about 25 days right now. So with no hang ups at all, a best case scenario to settle in Baltimore City would take 25 days. You will find out about quirks like this in your area as you do deals, use them to your advantage. I know a guy who goes in and tells people that he will settle all cash in 7 days. He knows that he can’t get a lien sheet for at least 3 weeks and he puts in the contract that he won’t settle without the lien sheet. So the Seller accepts his offer based on the amount of time he is willing to settle in and then he just comes back and blames it on the City because it needs to be extended.
As far as title searches. I never do them myself and wouldn’t. Let an attorney do them. If you are flipping the property you won’t be paying for it anyway. I would find a good title company to work with. Tell them that you will be assigning your contracts and ask if they mind having to sell off the title work. Reason I say this is because I get title work started immediately when I get a property under contract. When I find a buyer I tell them who has the title work and they are welcome to use them. If the new buyer does not want to use them the title work can be sold to the buyers title company with no delays in settlement. This can also expedite settlements for all cash investors. They like hearing that the title work has already been done.
Hope this helps. Most of this I learned by making mistakes. I don’t ever assign to someone unless I know they can buy, and I start title work immediately because time is not on your side.