New Title Co. Rules on Assignments and Double Closings.

[Burt L.]

I spoke with the owner of one of the few local title companies that do investor deals, and he informed me of new requirements for doing assignments or double closings.

To do an assignment I one must return to the seller and get a Sellers Acknowledgement that the contract will be assigned even though the assignability is already part of contract. The seller will not be advised of the price to be sold at, but just that the contract will be sold to another buyer.

To do a double closing, one must again get a Sellers Acknowledgement, but it must also include the amount the contract will be sold at. In the double closing example, the buyer is not advised of the amount of the original contract and the seller is. One can double close "around" the buyers knowledge at the time of the sale, but not both parties.

The owner of the title company advised me to get a Sellers Acknowledgement and assign the contract. He believed the buyer will not care as long as its a strong deal. However, I've read where Ryan Webber -for one- double closes on nearly all his deals to avoid ticking off his buyers, even on smaller fees. As this deal has room for a strong fee, I don't agree with the title co that the buyer won't care. Once they see the number, the emotions start pumping over what should be "their money" for doing the rehab, and I see nothing but trouble. I would like to be able to close the deal with hard money as was also suggested, but thats not likely for someone starting out.

The owner said that many title companies are using this approach to avoid liability. This is the only title company I know of in the greater Denver, CO area that does investor deals. Another, Axis Title, was sold by its owner to pursue investing herself, fulltime.

Any suggestions on how I can better do this deal? I wanted to mention what may be the "new normal" about assigments and double closings.

[J Scott]

Originally posted by Burt L.:

Yes, I would like to use transactional funding and do a "wet" closing. I was surprised that the title company would only offer this as a "dry" closing as I've heard them offer their own transactional funding before in front of REIA groups in the past. Maybe it is part of the liability piece of it they are now concerned with; it seems something else is at work in this now.

In specifically what timeframe does the issue present itself?

In other words, I assume that if you were to buy a house today and resell it in 10 years, the title company wouldn't require you to jump through hoops, do additional disclosures, do a dry closing, etc.

How about if you were going to resell in 5 years? 2 years? 1 year? 6 months? 3 months? 2 weeks? 3 days? 2 hours? 10 minutes?

Where does the title company draw the line where they decide there is extra liability in allowing someone who has purchased a house to resell it?