BUYER and SELLER agree to the customary split of closing costs.SELLER agrees to furnish at SELLER’s cost a Title Policy as part of this transaction.Upon acceptance of this offer, BUYER or his agent will deliver a deposit of $1,000 to the closing Title Company (to be agreed upon).

But if on the other hand, your BUDDY was trying to on-sell it without having Title or License - all bets are off! 

Then you have to be associated with a title insurance company so that you can issue  title insurance. 

You could do a Contract for Deed with a wrap around mortgage and have it setup to automatically transfer the title after the terms are met.

Your 1031 intermediary will create a holding company (an exchange accommodating title holder EAT) to take title to the property you want to buy and secure it for you and hold it for you with guarantees to you and financing provided by you.  

Are Title Companies involved in every Real Estate deal?  

Oh yeah, you have title search done and notification after first month and before 6 months.

As long as you understand the wholesaling process and are able to work effectively with sellers/buyers/title companies there aren't really any "rules or restrictions" specific to the state. 

The only difference is he will hold the title unlike a true seller finance where he completely turns over the title.

The mortgage would be extinguished with the sale of the tax deed and then the quiet title action2).