Episode Transcript
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Speaker 1 (00:10):
Today we're going to
be talking about one of the
biggest mistakes newerwholesalers make, which is
acting like a title company, isa transaction coordinator for
your deal and they're going todo all the heavy lifting and all
of the communicating with therest of your transaction.
Now, going into the real estateindustry, if you don't have any
(00:33):
previous experience, Icompletely understand why you
would believe this and feel thisway.
Going into a transaction, wehave this third party, unbiased
company that's going to come inand they're going to make sure
that my deal makes it to theclosing table.
They're going to communicatewith the buyer and the seller
(00:56):
and with me, and we're going toget the settlement statement in
plenty of time, and they'regoing to ask me for my wiring
instructions and do all thesethings.
That's not the case, see, youhave to understand that when you
contract the deal, you are incontrol of that deal moving
(01:17):
forward and it is yourresponsibility to make sure that
it makes it to the closingtable.
This is one of the reasons whywe are so fond of working with a
transaction coordinationcompany like Easy REI Closings,
and we have even introduced themas a larger part of Titanium
(01:38):
University, where each and everystudent that comes into
Titanium University now has afree transaction coordination
service from easy rei closings.
Because we understand why youwould have this thought that the
title company is going to doall this heavy lifting and I'll
save the money from using atransaction coordinator.
(02:00):
Right, I'll just, I'll lean onthe title company.
Here's what I want you tounderstand.
After doing thousands oftransactions and dealing with
closing attorneys and titlecompanies in all 50 states, one
thing that I've learned is theyare overwhelmed, more than
likely.
It is not their job to be yourtransaction coordinator and,
(02:23):
quite frankly, they don't evenhave all the information
necessary to be a transactioncoordinator.
They don't understand theseller's situation.
You do.
It's your responsibility tomake sure that you take care of
your deal and it gets to thefinish line.
Now there's things that wedon't know how to fix or do,
(02:44):
which is what we rely on thetitle company, but it's your
direct line of communication.
So, just as much as we talkabout communication with sellers
and asking the right questions,we need to make sure that when
we get a property under contract, the communication is stellar
from that point out, with allparties Going back to the
(03:07):
wholesale and red flag series,where I talked about.
Communication across the boardis such a red flag if it lacks
either from a seller or a buyer,or even the title company.
The way that you know thatcommunication is lacking is
because you are always the pointof contact and you're
(03:28):
initiating that communication.
So let's talk about the momentthat we get a property on a
contract.
What do we do?
We open title.
You should have an email thatyou are going to send out to the
title company and you open upan email chain that is now
privately your line ofcommunication with just you and
(03:50):
the title company.
You should also have an emailchain where you introduce the
seller to the title company.
This should be one of the firstthings that you do, because it
immediately proves that this isa legitimate contract and you
are serious about closing thisdeal with the seller.
It immediately will removeseller remorse and any fear that
(04:15):
they might have with doing thistransaction with you.
The other reason why this isimportant is because the title
company is going to need to getthe seller's information so then
they can start clearing title.
Now what does that mean?
Once you open title, title isthen going to go get a title
commitment.
That commitment will have anyliens or encumbrances on the
(04:39):
property.
More than likely it'll besomething like the mortgage or
back taxes or some sort of lienthat's been filed on the
property, or even maybe amemorandum.
These are things that wouldhave to be cleared and we would
have to get payoffs in order toget it clear.
To close, so the quicker thatwe can provide the information
(05:02):
to the title company and theycan start working on that.
That is their job, that istheir responsibility.
So you want to start the line ofcommunication between yourself
and the seller and the titlecompany, as well as yourself and
the title company.
Once you've opened up title,you should ask them how long do
(05:22):
you anticipate it would take forthe title commitment to come
back?
Once the title commitment comesback, is there anything that
you see that we need to do toclear title, to have a clear to
close?
Now there's times where maybeit would have to be something as
simple as an affidavit ofairship.
If you don't know how to handlethat, you would ask the title
(05:42):
company how do we handle thissituation?
What do you need from me?
But again, we don't want torely on the title company to
lead us and tell us, Just likewhen we are talking to a seller
during the closers formula.
We get our answers from thegreat questions that we ask.
Your communication with thetitle company should be daily.
(06:07):
Now there's times where titlecompanies will say, hey, I don't
need you to badger me, I don'tneed you to ask me for updates
every single day and you don'tneed to be doing this.
They need to be questions thatactually move the needle forward
.
What needs to be done so we canmove to the next step.
That is where yourcommunication should be lying
(06:29):
with the title company each andevery day.
Now, once you actually find anend buyer for this deal and you
get a signed assignment, what doyou have to do?
You have to email title companyand introduce them with your
buyer.
You have to do.
You have to email title companyand introduce them with your
buyer.
So each transaction should havethree email chains.
Now you have introduced thebuyer, you should ask the title
(06:51):
company for wiring instructionsfor the non-refundable earnest
money deposit.
This is imperative because now,in your private email chain,
you want to make sure that youreceive verification that the
non-refundable earnest money hasbeen deposited.
This is important because, as awholesaler, you never want to
(07:13):
stop marketing your deal untilyou have a signed assignment and
non-refundable earnest moneydeposited unrefundable earnest
money deposited.
Once that is done, now you arefocused on getting it clear to
close and getting everythingscheduled.
Now understand how I just saidthat you are focused on making
(07:34):
sure everything is unclear toclose and everything is
scheduled.
If you rely on the titlecompany or the closing attorney
to reach out to the seller,reach out to the buyer, schedule
everything and you don't evenstay in communication about them
doing that, there's going to bered flags that are raised
either from the buyer or theseller, because the title
(07:56):
company is busy, they have a lotof transactions and, quite
frankly, your deal is not theirpriority, it's your priority.
I have witnessed this time andtime again.
Title companies prioritize thesqueakiest wheel.
There will be times wherepeople will get frustrated, but
(08:16):
if you have not built thatrelationship and that trust
factor with that title company,it is more than likely your deal
will get put on the back burnerin comparison to if you are
constantly communicating andpushing the needle forward.
So, once you have the clear toclose, ask the seller would you
(08:37):
like to go into the titlecompany or would you like a
mobile notary schedule.
Oh, you would like a mobilenotary when would you like that
schedule for?
Let the title company know theseller on this transaction would
like a mobile notary at thisaddress At that point in time.
They would schedule that andthen you would follow up to
verify that the mobile notaryhas been scheduled With the
(09:00):
buyer.
Same thing Would you like to gointo the title company or would
you like to schedule a mobilenotary?
Awesome, get that scheduled.
Reach out to the title companyand ask how can I get you my
wiring instructions, mydisbursement instructions?
For us we have a templated formthat we just change the address
(09:20):
and the dollar amount of whatour anticipated assignment fee
is and we send that in days inadvance.
We don't wait.
We initiate that communication.
We are in charge of our destinyand making sure that our deal,
which is our priority, gets tothe finish line and everything
is taken care of.
Three days before closing weare asking the title companies
(09:45):
do you have the HUD drafted andcan you send that over for
everybody to review?
We want the seller to be ableto review that settlement
statement, we want the buyer andwe want, of course, ourselves
to make sure that there'snothing that pops up, because
there will be times where youwon't get a HUD or settlement
statement until the day of orthe day before, and there's
(10:07):
times where title companies makemistakes.
Maybe the payoff for themortgage is more than the seller
anticipated.
Maybe there's times where titlecompanies make mistakes.
Maybe the payoff for themortgage is more than the seller
anticipated.
Maybe there's a lien that theydidn't know about.
Maybe the lender for the buyerhas additional junk fees on
there that they didn't knowabout.
We want to make sure thateverybody has time to rectify
(10:29):
each and every dollar and centthat's going into this
transaction so it doesn't impacton closing date.
This is our job, it's ourresponsibility, not the title
company.
So if you're sitting back andyou're waiting on them to do the
heavy lifting, you will bewaiting for quite some time and
(10:49):
I'm here to tell you you will bedisappointed.
So for newer wholesalers, Irecommend if this does not sound
like something that you want totake on, because it can be time
consuming and it can also comeup with issues.
There's a title issue that hasto be cleared and you don't know
how to do it and you don't havesomeone on your team that knows
how to handle these situations.
(11:10):
It can kill your deal or it canat least elongate the process
to where you have to bringsomeone in that knows how to
handle that situation.
So I recommend that each andevery person use a transaction
coordinator who does all thislegwork for you.
Quite frankly, majority of usare not strong in this area.
(11:34):
We are strong in the leadgeneration, the closing, company
underwriting and dispositions.
Transaction coordination is nota fun topic.
Most of the time people's eyesglaze over In fact, yours
probably already has inside ofthis video.
So what you need to do is hirea transaction coordinator for
(11:54):
each of your deals.
Here's how you do this withoutit costing you your hard-earned
money.
When you go to market your dealfor dispositions, say, buyer is
to pay all closing costs plusTC fees Pass the transaction
coordination fees on to yourbuyer.
This is very commonplacethroughout the industry.
(12:17):
Don't be alarmed by it.
Most of the time whenwholesalers start this, they're
very nervous that the buyers aregoing to object to this.
But they won't.
And this way you're getting atransaction coordinator and
you're not even having to payfor it.
Pass that expense on to yourend buyer.
So if you're interested infinding out about what I
(12:39):
consider the best transactioncoordinator in the industry.
Go to titaniumtccom and workwith the team over at Easy REI
Closings.
All right, guys, that's ourepisode.
Let me know if you agree ordisagree about title companies
doing the heavy lifting andwhether or not you should use a
transaction coordinator in yourwholesale business.
(13:01):
Show me some love, like today'svideo, and we'll see you guys
tomorrow.