Beginner Closing Questions

[Kelvin Letron Brantley]

Hello BP family!

Ok I obtained my seller contract on Monday (wholesale deal in SC) and started marketing the property on Tuesday.  I got a buyer call on today (Wednesday) and they are very interested in the property to the point that the buyer contract is imminent.  My goal is to do a double close with transactional day funding; however, I have a few questions below about the closing process.

• How does the deed recording work for a wholesale flip with double close and transactional funding?  Do I have to record my purchase of the deal at the court house before I close with the buyer?  I'm working with a buyer's agent and she mentioned that she can only buy when the deed is recorded.  I'm not sure how true that is...  Anyway she mentioned that it takes 5 days both ways on a wholesale flip for the deed to be reflected.  I thought to myself, that if that was the case then people wouldn't be doing it and there would be no need for transactional day funding.  Any insight would be appreciated.
• How can I efficiently close with my seller when they live 100 miles away?  When I signed the contract to buy the property, I filled up the tank and went to the seller's location so that they would feel more comfortable since they were an older couple.  Now that it looks like I'm going to have a buyer soon, how can I orchestrate the closing so that I don't have to go back down to the seller's location?  Do I have to physically be there with the seller to close with them?
• Is their a deadline to finding an attorney to close after putting a house under contract? As I mentioned above, I put the house under contract two days ago. I haven't spoken to a closing attorney yet, but it looks like I'm going to have to now since I have a buyer ready.  Is there a maximum amount of time you can wait before securing a closing attorney?  When is the optimal time to secure and attorney?
• How long does title search take and when is the title search fee paid?  I would like to close on this property as soon as possible.  How long does title search normally take?  Days? Weeks?  Also when do I pay for title search?  
• Also when is inspection typically paid?  At the closing or up front? I was thinking about ordering an inspection as well of the property.  When is the inspection paid?  In a wholesale deal, is it typical to start the inspection only after a buyer is found or before?
• What are some things that could cause a closing to fall through?

Thanks,

Letron

[Assaf Furman]

@Kelvin Letron Brantley I'll address several of your questions below:

>How can I efficiently close with my seller when they live 100 miles away?

With a power of attorney. They need to find someone who can attend the closing, preferably their attorney or a trustworthy person. As the buyer of their property same applies to you; either you have to attend or give a POA to someone you trust to sign instead of you.

>Is their a deadline to finding an attorney to close after putting a house under contract? Is there a maximum amount of time you can wait before securing a closing attorney? When is the optimal time to secure and attorney?

That's something that would normally appear in your contract. In case it's not indicated then you should find one ASAP as you should have had one before having the binding contract. For the sake of doing good and honest business don't wait with it.

>How long does title search take and when is the title search fee paid?

Fees related to the title search, transfer, insurance, attorney etc. are collectively called closing costs and are paid at closing. Once the attorney finishes he/she will send you a settlement statement where these fees are detailed. Normally it would take about 5 business days to clear the title and prepare the closing documents but it depends on the attorney and the specific situation as there may be problems with the title that would need to be resolved, and that could take a while...

>Also when is inspection typically paid? At the closing or up front?

An inspection is a service that's unrelated to anything else; you call an inspection company, they inspect the property and send you an invoice. If you have a buyer already I can't see why you'd want that. Typically, the wholesaler gives basic details and his/her own estimation to the rehab and ARV, it's up to the end buyer to perform a thorough inspection if they choose. I know of wholesalers that at times would go the extra mile to have an inspection report as part of their marketing package. Not only does it look more professional, it also justify a high wholesale fee because it reduces the number of unknowns. Getting back to your case, you have a buyer so I wouldn't worry.

>What are some things that could cause a closing to fall through?

That's a bottomless list, which is why you want to work with a local professional who can help you completing this deal. The knowledge you'll gain from it is priceless and will help you in your future deals, which is why worth dividing the profits with a mentor that will hold your hand throughout the process (or any other mutually beneficial arrangement). You can find one by going to a meetup explaining your situation, turn to BP members in your area that are interested in expanding their network or even find an experienced realtor that you feel like you can work with.