A wholesaler buys a property directly from someone claiming to be the property owner. They close the sale without going through a title company. Then, the wholesaler gets a realtor to list the property for sale. The property goes to contract and now the wholesaler is trying to close via a title company. But the title company says whoa! Wait minute. The wholesaler seemingly cannot understand what is happening.
There's a TON of people out here trying to shortcut the evidence-based process for the sale and transfer of title to real property. Now, in this case, the seller has the ABSOLUTE benefit.
(1) Selling directly to the wholesaler (or any buyer) should negate some of the seller closing costs.
(2) If the wholesaler's due diligence processes are weak, the wholesaler might fall victim to fraud.
However, a savvy seller should already understand that many reputable real property buyers like Highstreet Holdings will pay all closing costs.
While the wholesaler wants to keep cost down and to help justify a possible low-ball offer by avoiding title companies and title insurance, the wholesaler is taking the risk of purchasing a property from a seller who does not actually own the property.
Then, the wholesaler wants to sell that problematic property to you!
Often, we will note people advising these wholesalers to have the seller sign this affidavit, or that that affidavit to attest to the fact that they are or were, the real and legal owners of the property.
But what good is a signed affidavit from a scammer attempting to sell property he does not own in the first place?
The bottom line is that there is NO substitute for the evidence based real property transfer practices that were established to provide for a safe, secure method of transferring title to real property. When one tries to sidestep the process, they are simply asking for trouble.
Along with these facts, here's why you should ALWAYS close with a title company.
When it comes to closing a real property sale, opting out of using a title company can expose you to significant risks that are often underestimated. A title company plays a crucial role in ensuring that the transaction is secure and free from potential legal issues. Without their expertise, you may inadvertently overlook critical aspects such as title searches, liens, or encumbrances on the property.
One of the primary functions of a title company is to conduct thorough due diligence on the property's title history. This process reveals any existing claims or disputes that could jeopardize your ownership rights. By skipping this step, you're essentially gambling with one of your most valuable assets—your home or investment property.
Moreover, if any issues arise after the sale—such as undisclosed liens or ownership disputes—you could find yourself facing costly legal battles or losing your investment altogether. Title insurance provided by these companies offers protection against such unforeseen circumstances, safeguarding your financial interests.
Rest assured that while it may seem like an unnecessary expense at first glance, using a title company is an essential safeguard in real estate transactions. Protect yourself and your investment by ensuring that all aspects of the sale are handled professionally and thoroughly. Don't take unnecessary risks; choose to work with a title company for peace of mind during what can be one of life's most significant financial decisions.
At Highstreet Holdings, every purchase we make is closed by a reputable title company.
Because of this, as a buyer of our properties, we pledge that the due diligence on property has been professionally performed. We also pledge that title insurance will be in effect and that we can and will deliver good, marketable title on each and every property we sell.