Wholesaler asks me to use his title company

[Gina Nicolas]

Hello everyone, I'm getting a house in PA from a wholesaler and he wants me to use his title company. My business partner thinks that he is hiding something and we should not do the deal.  My question is, does he really matter using his title company or mine. Regardless which title company that we are using, the title company will have to guarantee us a clear title. I really want to make the deal, if I go with the wholesaler title's company, what should I watch for?  any red flags

Everyone input will be very appreciated

Thank you all and happy holidays

[Jay Hinrichs]

Originally posted by @Brian Pulaski:

I’ve been there. Not sure if PA is a lawyer state or not, but when I was asked to use the wholesalers title company, my lawyer and I did our homework. We determine the company was legit. We then reviewed the title report. It was an absolute disaster. There were 34 pages of exceptions to them insuring title. Took quite a bit of back and forth until we finally agreed. They also cost me 3-4 times more than any other title company (this is where I think them wanting you to use their company comes into play).

there are only a certain amount of actual title insurers in the US.. the Attorneys are AGENTS for the title insurers..

what is common is we confuse escrow function with title insurance they are seperate..  Now there are as you point out some insurers that are what i call fringe or whatever and you usually find them being used by Auction sites and high volume sellers that are looking for deep discounts for their business.  So as very simple solution to this.. is you simply Ask the title/escrow company  one question

Who underwrites your title insurance ???  if its one of the big boys   Fatco  Fidelity family of companies,  etc etc.. then your generally fine on title insurance just read the title commitment and if you dont understand what your reading ask the Title examiner who works for the title/escrow company to explain items you dont understand.. then if you really need to you can engage an attorney.. those who close in Attorney states totally rely on the Attorney to examine the title for them and write the policy as an agent for the title insurance underwriter.

What I bet is happening here is that the wholesaler wants to use his title/escrow because not all title/escrow companies like wholesale deals and not all will do them or some will require full disclosure to all parties signed by all parties.. thats how the title and escrow works for instance here in Oregon.. And wholesalers dont like that   you know  full disclosure ..