Is a closing agent needed?

Question

I am getting ready to do am all cash purchase for my first flip property. I'm buying it for 5k, sweet deal.

My question is, do I need a closing agent if I'm paying all cash?

Why or why not?

Thanks everyone, I'll keep everyone posted on the progress.

Wayne Brooks · Answer

The fact that you are asking this question, screams that YES you need a closing agent....and title insurance, title search, etc.  And especially since it's your first flip, "you don't know, what you don't know". Ignorance is expensive, not blissful.

Are you required to use a closing agent.....no.

Are you required to verify the seller is the only owner....no.

Are you required to verify if the seller is an owner at all.....no.

Are you required to see if there is $20k in back taxes owed......no.

Are you required to see if there is a mortgage on the property......no.

Are you required to find out if there is $50k in liens/judgments against the property.....no.

Get the idea?

Wayne Brooks · Answer

@Jonathan Key

Yes, my normal closing agent, and get title insurance.  Don't need them for a contract, just the title insurance and closing.  Have I done deals with simply a QCD, yes.  But I had a title search, and they were short term holds/flips.

Phillip Tillotson · Answer

You should disclose what you know before asking. The way you phrased it had me thinking the same thing everybody posted. I just didn't post it.

We are all well intentioned. The reason they phrased things the way they did is because they wanted to express the importance of a closing agent. Often times, a new person will not understand this and will just do whatever it takes to save a dollar.

Had they known that you already do closing duties for yourself and others then they probably wouldn't have responded so harshly.

Jennifer Lee · Answer

yes and second @Wayne Brooks @Ned Carey

Can't agree more

Ned Carey · Answer

No one was patronizing. You got very good answers to your question. I thought I was being nice.

Jennifer Lee · Answer

hi al

I'm very glad to hear that you have done a thorough due diligence:)

I think a closing company is a good idea, to cross check what you find. Each municipality also has different tests and permits that needs to be done before you can close.

Now closing on cash deal isn't that expensive. They pretty much waive a lot of cost anyways. Closing is expensive for financing bc of the mountain of paperwork and recordings.

I work with a company that if we already pulled title else where, they would waive that fee. Or if I use them to pull title and later close with them they won't charge me double.

In cash deal your cost basically is title insurance, transfer/stamp duty tax, and recording fees + pro rated items (property tax)

I deal with a lot of foreclosure and such. And my title companies has saved my clients for future headaches.

*3rd mortgage not yet foreclosed (client walked away got hand money back),

*not passing dye test, bank insist its OK, and it was 15k fix and title will not transfer til fixed (client walked with  hand money back)

*occupancy permit headache, past due water/sewage/taxes, zoning verifications. They knew the ppl to talk to and smooth things over to let us close smoothly bc they deal with boroughs on a daily basis.

Its good to have them on my court to talk to seller and my clients. We have been able to get price reduced for all these issues, but risk out weighs the benefit.

Jonathan Key · Answer

@Wayne Brooks So in this example (I have seen some similar in my area, just not for 5k), you could use a full service title company - which most would even provide you with a purchase contract and/or private seller agreement. You pay their fee as the buyer initiating the contract, money is placed in escrow until everything clears. And they would do all that legwork and provide title insurance that (should) clear up all your objections.

Correct?

Al Mcbee · Answer

@Wayne Brooks @Ned Carey  @Jennifer Lee

LOL!!! Damn, I may have been born at night, but I assure you it wasn't last night.

I already do my own due diligence, I try to know everything about a potential property title, if any liens that may be imposed on such, and who's the actual owner before I approach a seller, Information is Key in negotiations, but I'm sure you three already know this.

I normally use conventional lending for buy and holds on SFR, and I don't like paying for the services they charge me, when I already know what they looking for before they do.

Like I mentioned in the EP this is my first Flip and first all cash deal, and didn't know if the closing agent is required by law, damn. Since I, obviously, don't, I will be saving money for work that I already do.

Before you patronize someone, be a little more understanding. Wayne said it best, "You don't know, what you don't know".  Isn't that why we are all here?

Continual learning and growing from each other to become better and more profitable investors. WOW!

Be Nice!!!

Ned Carey · Answer

Yes you can record a deed yourself. You are a fool if you do.

You absolutely need a closing agent if you want title insurance.  If you knew how to do this properly without a title company you wouldn't be asking the question. If you are going to flip this then you need to know if the title is insurable or you will be spending a lot of money only to have a property you can not resell.

PS Wayne posted while I was composing  mine. If you don't believe me re-read Wayne's post above.

Neil Aggarwal · Answer

You are never required to use an agent.

Is a closing agent needed?

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