If an owner has title in hand, how does the purchase work?

Question

I'm looking at a FSBO property and the owner states has title in hand. The owner claims the only thing that needs to be done is a transfer of title for about $150 (in Texas) with a cash purchase. This seems too simple, but would be wonderful. (I've only bought SFH) Does this work if an owner still had a mortgage and I was paying cash or would there be closing costs? And if there were closing costs, would I be responsible as the buyer because I'm buying "Personal Property"? Thank you!

Jeremy Kuchenbecker · Answer

I'm in Florida but your best bet would be to always contact a title/closing agency. A title transfer is generally all that NEEDS to be done (quit claim deed) but you should check to make sure he has clear title even though he has it in hand, no liens etc, make sure the title is recorded properly, and get a title insurance policy. If you look at your previous HUDs or CD from your SFH there's not much of a difference whether the owner has title in hand. Every state is different but never take someone's word for anything in real estate it could cost you down the road, verify verify verify.

Jeremy Kuchenbecker · Answer

I'm not the forum police. You can go one of two routes: 1) close in a trust with your LLC as the beneficiary. The trust gives you anonymity and the LLC gives you liability protection2) close in your name and look at purchasing an umbrella policy. Some people want LLCs because it makes them sound official. They have yearly fees and have limited/more costly options with insurance and can still be pierced. Luckily I havent had to find out which is "better". * Not an attorney

Account Closed · Answer

@Carrie Cavins You did not state if the person on the title is the same person who is selling it. This will have additional items that may be required . I also like to supplement the SOL with a bill of sale. You also want to make sure the park is going to let you rent it etc. Taxes should be current on it as well ( verify) One thing you can do is talk to a reputable mobile home dealer and see if they can quarterback you the paperwork to verify you are doing everything correct. They should not charge you too much but once you understand the process, you should be able to do it yourself.....

Greg H. · Answer

@Carrie CavinsBond for deed cannot be done in Texas

Chad C. · Answer

@John Arendsen Bond for deed might be Louisiana specific, but other states have similar contracts. I think it's similar to California's land contract. I was just wondering if your repossession process was difficult. @Carrie Cavins this has some really good info in it. I would think any title company could write up a contract for you http://www.lonestarlandlaw.com/owner_finance.html

John Arendsen · Answer

In Cali it's all done through the California Department of Housing and Community Development (HCD) Title and Registration. I'm not sure who regulated MH's in Texas but that's probably the best place to start before spending $$$ on an attorney.

Rachel H. · Answer

If it's your first deal, you can do either. Honestly, it's not that big of an issue. If you like doing mobile home deals, then you can go ahead and set-up an LLC down the road. If not, then you can get out and not have to deal with the separate LLC dedicated to mobile home investing. Believe it or not, I've known others to try a deal or two in the business only to find out it wasn't for them. It really depends on your comfort level. Regarding the closing, it's a much simpler process than single-family homes especially if you're purchasing with all cash on personal property transactions for manufactured homes. @Greg H. is correct about the Statement of Ownership and Location (SOL). If there are liens on the home (i.e. mortgage, taxes, etc), they will need to be taken off before you close. They won't do the transfer until all the liens are taken off. Here's the site link on titling for further reference:https://www.tdhca.state.tx.us/mh/ownership-location.htmHope that helps!

Jeff B. · Answer

When transferring between unrelated parties, NEVER take a Quickclaim but use a Warrant or Grant deed. You also MUST have a title search & insurance. With these, you're playing Russian Roulette with your money.

John Arendsen · Answer

In Cali all MH transactions MUST go through an escrow to clear title and check for jr. leins or any title issues.

Greg H. · Answer

In Texas, all that is needed to transfer the title on a mobile home not attached to land is the SOL(Statement of Ownership and Location) to be notarized filed with the state. The cost is $150