Paying Title Insurance Twice On Double Closing A Wholesale Deal

Glendale, AZ · Member since 2017 · 19 posts · 2 votes

When doing a double closing on a cash real estate wholesale transaction, have any of you had to pay title insurance on A-B & B-C contracts?

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Jon Holdman

Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes

If you use the same title company for both transactions you can do a "hold open" on the AB transaction and the only pay the difference on the BC transaction. Normally A would pay for title insurance on the AB transaction and B would pay for it on BC. Assuming you're B, you would only pay for the difference in the two values by using the hold open.

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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
8y
If you use the same title company for both transactions you can do a "hold open" on the AB transaction and the only pay the difference on the BC transaction. Normally A would pay for title insurance on the AB transaction and B would pay for it on BC. Assuming you're B, you would only pay for the difference in the two values by using the hold open.
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Jon Holdman I appreciate the answer. I'll have to give this info to the title company. They are assuring me that I HAVE to pay full title insurance for each one closing.
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Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
8y
I don't do wholesaling, but have done a "hold open" on a fix and flip deal.
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Jon Holdman I spoke with another title company and they recommended the same thing and said it would work in this case. Thanks again!
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
8y
Originally posted by @Mark Lopez:

@Jon Holdman I appreciate the answer. I'll have to give this info to the title company. They are assuring me that I HAVE to pay full title insurance for each one closing.
Owners title insurance is optional. You don't have to buy it for either closing.
Notice how I'm not saying you shouldn't... just that you don't have to.
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Tom Gimer How would you recommend to opt out to the title company? My title company is claiming it is mandatory...Sounds like bologna, but yeah... Trying to hit me with it 2x...
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
8y
@Mark Lopez
Around here we just say "No thanks" and the title company rep goes "What?!?!?" and then eventually produces a form to sign in which coverage is declined.
It's uncommon but totally legit.
I like the advice of @Jon Holdman if that tactic is available where you do business.
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Alex Corral
Denver, CO · Member since 2017 · 142 posts · 104 votes
8y
Would it be safest to buy on the A-B transaction & not the B-C? Or vice versa?
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
8y
@Alex Corral
Me personally ... I would prefer not to be the uninsured owner in a chain of title.
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Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
@Mark Lopez It is TOTALLY doable. It will cost you a little bit more to do an Open End Title or "Hold Open" title, but obviously less than paying for it twice.
IF you are going to limit owner's policy, it should be on the B-C transaction, not the A-B transaction. You are the B. Cover your butt! In AZ (not sure about other areas), Owner's Title is billed to Buyer on page 2 of the closing disclosure, but reimbursed by Seller on page 1, so it won't cost you anything on the first transaction (unless you have some type of agreement for paying all of the closing costs).
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Cara LonsdaleI think these guys are "DOUBLE DIPPING"...they say it's company policy and there is no way around it. Any advice? I'm doing a double closing...they say i'm going to have to pay it 2x. one for the a-b and then again for b-c (which my end buyer will cover...but still) .
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Alex Corral They are forcing me to have both...it's company policy they say.
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Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
Originally posted by @Mark Lopez:

@Cara LonsdaleI think these guys are "DOUBLE DIPPING"...they say it's company policy and there is no way around it. Any advice? I'm doing a double closing...they say i'm going to have to pay it 2x. one for the a-b and then again for b-c (which my end buyer will cover...but still) .
How far are you in the process? Switch it over to Security Title. They can do an open Title close for you. If you need help facilitating, PM me and I will reach out to my contact at Security and get you set up. We do it all the time for our flips and trustee sale rehabs.
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Mark Lopez
OP
Glendale, AZ · Member since 2017 · 19 posts · 2 votes
8y
@Cara Lonsdale I was thinking about switching too, but i i'm a week from closing. It might cause problems with my seller and buyer at this point. :/ I won't be using them again though.... a shame i tell you...worst service and customer service ever... Thanks for the advice. I appreciate the input :]
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Cara Lonsdale
Realtor and Investor · Scottsdale, AZ · Member since 2017 · 1k+ posts · 1k+ votes
8y
Originally posted by @Mark Lopez:

@Cara Lonsdale I was thinking about switching too, but i i'm a week from closing. It might cause problems with my seller and buyer at this point. :/ I won't be using them again though.... a shame i tell you...worst service and customer service ever... Thanks for the advice. I appreciate the input :]
Next time, go through Security Title, and tell them up front that you want an open title because you will be doing a rapid re-close.
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