title insurance needed to wholesale?

Question

I contacted the closing attorney for a title company I used to work for to inquire whether or not they did closings for assignments and this is what he replied back to me:

"Yes we could do the closings, but you may have issues obtaining title insurance. The title insurance companies are cracking down on these types of transactions, because they look for good money transfers. If you show good money throughout you would probably be okay."

Can anyone ellaborate on this?

Jason Cummins · Answer

Or you could just start calling title companies yourself and interviewing them.

Basically just tell them what you plan to do and how you plan to do it, and if the gawk or have no idea what you are talking about, just go to the next one.  If they tell you that they can do it, ask them if you can send them a copy of your contracts you plan to use to review them and make sure they will use them.

Account Closed · Answer

Katrina, I would suggest going to your local real estate investment club and asking other investors who they use for an attorney and title company. Both need to be investor-savvy and willing to work with you on creative deals. That's what I did and it saved alot of time calling companies who are only interested in working conventionally. Mike

Robin Vidovich · Answer

Title search is done before close and the title insurance is paid for by the end buyer at the close table.

Jason Cummins · Answer

No the title insurance is applied at closing, not the title search.  You as a wholesaler do not need to worry about title insurance.  Title insurance is really between the original seller and the end buyer.

Jason Cummins · Answer

I would try another title company.

You do not need title insurance for wholesaling the house.  However, the person that is buying the property will need title insurance.

Sounds to me that this title company may be a little flakey on the assignment process and you do not want one that is flakey on that.

Account Closed · Answer

Thanks Jason!
When is the title insurance obtained? During the title search correct?