Do I Really need a Title Company?

[Raymond Lee]

Here's my situation:

I am attempting a wholesale deal from a highly motivated seller to a rehabber. Looking to close ASAP, possibly next week.

The seller has assured me there are no title/mortgage/lien issues. So does that mean I can forego title search/investigation because apparently it takes about 2 weeks to perform (as we're looking to close asap).

Can I just skip past a title company?

I'm thinking of just going with a real estate closer attorney to collect and distribute funds and to make sure our deal goes through.

Sorry if this doesn't make any sense or if any of my terminology is off - I'm still new.

[J Scott]

First, the answer to your question is yes, you are more than welcome to skip the title search if you'd like, and just take the seller's word for it when it comes to whether there are any liens on the property.

That said, it's probably one of the worst decisions you could make as a real estate investor (or as anyone who plans to purchase a piece of property).

Here is why:

1. It generally only takes a day or two to do a title search, not weeks;

2. It's cheap (probably under $200) to do a title search;

3. Just because the seller doesn't know about a title issue or lien doesn't mean they don't exist. What if there is a lien in place or a claim of ownership from before the seller owned the property?

4. If the seller knows about a lien or claim against the property, why do you think he'd be honest about it, especially if he knew it would mean the sale couldn't go through? Trust is a wonderful thing, but has no place in a real estate transaction.

Btw, if it was the seller who suggested skipping the title search or it was the seller who told you the process would take "a couple weeks," then it's pretty clear that this seller either doesn't know what he's talking about or he's trying to scam you.