Subject-To Closings Location

[Stephen Stokes]

For anyone out there doing subject-to deals in Austin, are you doing closings at a title company, your lawyer, seller kitchen table or some other option? 

[Alex G.]

I closed many subject to deals at seller’s kitchen table when I was a budding investor. This was  before I learned the many ways in which the title can be screwed up... And same for your future profits. 

 Closing at the seller’s kitchen table is foolish, as you won’t get title policy. Unless you’re a pro level title examiner you won’t personally be able to discover various issues with the title. Moreover, to establish seller’s correct title vesting, the title company has sellers sign a variety of additional affidavits and statements about family history, liens and such at closing.  Should an issue come up later, they’ll go after the sellers legally. 

If their search has a mistake, their policy will cover you. If your search is messed up, you’ll have to pay to clear out the issues yourself. 

Where to find title companies willing to close subject to is another matter. There has been a big push on title company underwriters from FHA/VA/conventional lenders to stop closing subject to deals. I used to close them at Independence Title and TNT (John Pleuthner's office), but they have advised they stopped closing them. Patten Law firm that caters to investors in Texas still closes them and issues the title policy, at least that's my understanding.