Real Estate Investing » Wholesaling

Pete Youngs Prehab to Rehab 101 – Episode #49

jz — Tue, 27 Oct 2009 14:38:41 +0000

3 Techniques for Under $500 that can Double or Triple your Wholesale Fee

Today Mr. Rehab Pete Youngs stops by the show to give us some quick tips that require little skill and money that will increase your wholeale profits. Pete has been investing in real estate for over 30 years. He teaches real techniques that you can apply in your business that will save you 40% to 50% on your rehab properties everytime! Imagine getting paid for selling the property and doing the rehab. That is what Pete can show you. If you can cut the cost of your rehab in half everytime it is let you are creating profit out of thin air. What I like about Pete is he teaches. It is not fluffy crap! Plus everything Pete has accomplished over the years is very impressive. Here is some more information on him.

Pete Youngs’ is actually is the business of real estate investing and rehabbing not just teaching people how to rehabilitate properties for pennies on the dollar of the normal estimated cost.  His knowledge and ability to get the highest quality results for the lowest possible price earned his companies such prestigious renovation contracts as the living quarters at the 1996 Atlanta Summer Games, Courtyard By Marriott Hotels, two different contracts within international communications giant MCI, Publix Distribution Center, and hundreds of single and multi-family homes nationwide.

Pete Young’s is a successful investor, business owner, author, and lecturer dedicated to helping others become successful as investment and real estate entrepreneurs.

Question of the day!

Do you think the goverment is going to force us to go green? Is is a good thing or a bad thing and WHY?

There is only 2 Days Left!

Are you still waiting to enter the Short Sales Unleashed Contest? What are you waiting for? Do it NOW. The deadline is in less than 48 hours. The information is linked up below. You may miss out going for free to the must attend real estate investing event of the year! The deadline for the contest is October 29th, 2009 get your entry in right now!

To higher profits,
JZ

Resources Mentioned in this Episode

Short Sales Unleashed – Underground Uncensored Event – http://regoddess.com/JonZ

Short Sales Unleashed Contest – Ends 10-29-09 – Click Here

Real Estate Investing Breakdown Video – Wholesaling Real Estate in 2009 with Vena Jones-Cox

jz — Thu, 16 Jul 2009 08:36:06 +0000

Continuing on in our Real Estate Investing Techniques explained we have an hour and a half long video with the goddess herself Vena Jones-Cox! She gives a ton of great information in this presentation about wholesaling and what is working and what is not working. NO fluffy crap! Vena is the BEST!

Check it out leave some comments or questions you have about wholesaling!

Real Estate Investing Techniques: Wholesaling

jz — Tue, 14 Jul 2009 19:51:16 +0000

Why Every Real Estate Investor Newbie or Super Advanced Should Wholesale and How It’s Done

Did you know, in your spare time, you should be making an EASY extra $150,000 per year by using this simple, low risk, no money out of pocket strategy? Your INSANE if you are not wholesaling real estate right now! There are too many deals on the market and lets face it you can’t by them all and nor should you want to, so why not cash in on deals you are already spending money marketing for?

Why Every Investor New or Old Should Wholesale!

It provides huge profit checks without even having to buy a home. You get cash now instead of having to wait like a buy and hold long term for equity and appreciation
You don’t need money or the experience to complete a rehab and sell the property retail
Wholesaling provides money for new investments or to keep your real estate business running (Office expense, marketing, etc.)
You can use your wholesale fee’s to pay down your rentals so you can own your properties free and clear in 5 years or less (Quicker if you live in a cheaper area of the country)
There is little to no risk! The only thing you really have a chance of messing up is a relationship and if you use the correct strategies you will not even have that happen. If it does so what! Fugetabout-it! The only thing that counts is that you went into the deal with full integrity and you tried your best to create a win-win solution to the sellers problem. You can’t let one screw up stop you. There is a learning curve to everything. I can guarantee one thing you will get out of screwing up, you will never screw the same thing up again(Unless used to ride on the short bus…no seriously). You learn from your mistakes.

Wholesaling is the first strategy every new investor should master, in my opinion, when beginning their real estate investing business. It is the one of the strategies that I choose to focus on early in my investing business and it has paid of tremendously. Like Geico says, it’s so easy even a cave man can do it and even if you do screw up a deal your not going to be destroyed financially. Bottom line, wholesaling is easy, has little risk and BIG rewards!

Wholesaling has allowed me to….

Become a full time investor because it replaced my income 10x of what I used to make at my job
My partner and I have been able to pay off all of out old debts
Travel more in one year than all of my life
Become free and as Vena say’s “Certified Unemployable”
And a ton of other things that I could list but it would take all day

So now you know why I love wholesaling what is it?

Wholesaling a real estate deal is a simple as…

1. Find a property

2. Pre-qualify the property

3. Get the property under contract

4. Do your due diligence

5. Find a cash buyer

6. Get Paid ($7,000 – $30,000 per deal on average depending where you live and the real estate prices in your area)

You can also watch a wholesaling overview video with Vena Jones-Cox and me the J to the Z here

Well that sounds great but how does it all actually work?

Lets talk some specifics….

Find a property

As I am writing this article this is easiest it has ever been to find a distressed property for sale. You could walk outside your house right now throw a rock and you will probably hit a house that is in foreclosure. There are so many houses that have been affected by the mortgage meltdown and with the meltdown came the “Perfect Storm”. The “perfect Storm” has created a the opportunity of a lifetime for real estate investing entrepreneurs. Not only is this side of the real estate world thriving right now, we are helping real families and cleaning up the economy.

(As a side note….the media should do stories on some investors with these values not the scumbags they usually talk about. It would be nice to show the human side of real estate investors. We are not out to just steal peoples homes here!)

That being said not all of the junker houses out there will work as a wholesale deal!

Wholesale Deal Criteria

1-4 family property
5 and up. These get a little more challenging.
In type 2 (Border Zones – Mixed homeowners and renters, middle to low income) and 3 (Bread and Butter Zones – This is an area where it is mostly homeowners, start up houses, middle income, pride of ownership) neighborhoods. Pick your sweet spot! I don’t like to go any further than 30 minutes away from my house. If you do you with be wasting a ton of time driving back and forth to meet with sellers.
Poor to Fair Condition.
Preferably unoccupied. It is easier to show your buyers a vacant house! Tenants are not just problems for landlords! They could be the only thing that stands between you and a $15,000 pay day, one day! You could always slip the tenant a $20.00 every time you have to bring someone buy or do anything. That seems to make things go smoother for some reason.
They have to have a low mortgage balance, but it is not necessary if the seller is in foreclosure and can do a short sale!
Seller HAS to be motivated. NO motivation, NO deal!
Seller may consider seller financing – This is freakin awesome because now you can pay the seller more and maybe even make some cash flow on a wrap mortgage (advanced technique we can talk about some other time.
Property that cash flows – If you have any landlords on your buyers this is just for obvious reasons

So how do you find a property that is a good candidate for a wholesale deal? Well there are many different ways but I am just going to go over a few effective ways we are finding sellers right now. I am going to give you 3 techniques that cost little to no money and can be done in 4 hours a week or less.

Driving for dollars

When you are driving around, going where ever life’s path is happening to take you, do you take note of all of the golden opportunities that you drive by everyday? You should! Each time you get in your car have a pen, pad, and preferably a camera ready for action. Look for houses that has overgrown grass, mail piling up, old ratty newspapers, or a ton of deferred maintenance. When you find one, STOP! Write down the address, make some notes about the property so you remember it, and take a picture. Your going to use this information later try to find the homeowner. An awesome way to get 400% better results is to knock on the doors of the 2 houses next to the vacant house and the 3 houses directly across the street. Your mission: Look for the Talker! Odds are out of those 5 houses you will find at least one neighbor that will spill the beans on what happened to the homeowners and how the house got like that. They may even have a name and a number where you might be able to contact the owner…you never know! O… and 1 more thing odds are you are not going to knock on all 5 door, you just need to find the neighborhood talker and then your done! If you can’t get any of the sellers information from them make sure you leave some business cards so they can give the to the seller. There are a ton of vacant properties in every neighborhood around the world you just have to open your eyes and then take action. When you find these vacant golden nuggets here is how you can find the homeowner.

Go to your local tax record and look up the owner of record
Send a Postcard to the house (You don’t need the owners name or address that way. It may get forwarded on to the seller and then they can call you. Or it may come back with the sellers new forwarding address. We are going to talk about sending direct mail next. If these 2 things don’t work then you can take it to the next level)
Search for the sellers new address on the free searches on the internet like Zaba Search or Black Book Online or one of the other good FREE search systems out there (Leave some sites in the comments if you have any)
Search for the seller using a paid skip tracing service. Skip Tracers are supposed to locate people who have moved and don’t necessarily want to be found. A lot of services out there you can pay to search for like one person at a time. You could also sign up for a skip tracing service but plans are very expensive and we can usually find someone by using the free techniques. We all love FREE.

Direct Mail

- this is the perfect follow up for driving for dollars mail a letter or a post card to the seller of the vacant property. Some tips for letters and postcards – use a live stamps, hand address the homeowners address and the return address,and whenever possible use an odd shaped envelope. These tips will explode your response rate for direct mail. After you find vacant houses send them a letter and wait for a response. If you get the mailed returned to you vacant it is possible they will have the forwarding address for the seller on the envelope, at that point you will send out another letter or postcard to your prospect. If that fails go back and do a skip search like we talked about in the last strategy. You could also mail the pre-foreclosure list, probates, people coming out of bankruptcy, and there are many other lists of motivated sellers that you could target and direct mail. It is always great to have a phone script prepared to handle the calls that come in from your direct mail.

Bandit Signs

– Bandit Signs are a form of Guerilla Marketing . They are those cheap corrugated plastic signs that you see tacked up on the side of telephone poles. You’ve seen Bandit Signs everywhere, with messages like “For Sale,” “For Rent,” “Garage Sale,” signs that direct drivers to a location, and just about anything else you can imagine. They are an easy way to reach a lot of sellers and you can do it while driving for dollars. You could also pay someone a $1.00 per sign to put them up. Now these signs are not really welcome in most neighborhoods so a great way not to get in trouble is has someone put them up Friday after 5pm and take them down Sunday night. In this case you will pay them $1.00 to put the sign up and $1.00 to take it back down and keep inventory for the next week. A good goal is to put up 50 signs pure week. You can also use the cheap H wires to stick your signs in the grass. One of the best ways to use bandit signs and get a great response is to have the sign be handwritten. You can have Bandit Signs actually print handwritten signs for you. Bandit Signs are a simple tool, but they are very good and fast at getting the phone ringing and helping your real estate investing businesses boom. They are also one of the most cost-effective way to market your business. Bandit sign creation tips: Only have 3 to 5 words and a phone number on each bandit sign. Studies show that people can only make out 3 to 5 words when driving 40 mph. Studies also show people will write down a phone number. If you have a website on the sign people tend to try to remember the website url and tend not to write down the phone number. In most cases if they try to remember the site name they either get it wrong or just forget to visit in the 1st place. Getting the prospect to write down a phone number is a way for them to take action right away and if they take action is a lot more likely they will make that follow up phone call. I want you to take action now and get some sellers with wholesale deals calling your phone. These are just 3 easy techniques that you could implement right now in your business that will bring deals in with little to no money. There are a ton more but this is an easy great way to start. What is your best way to find wholesale deals? What is the story behind your 1st wholesale or your best wholesale? Leave your comments and stories I look forward to reading them. In the next article we will continue to talk about the Wholsaling process.

Tips for Real Estate Listings – Wendy Patton Episode #39

jz — Mon, 06 Jul 2009 19:32:24 +0000

Wendy Patton is the nations leading author and trainer on Buying and Selling Real Estate on Lease Option, Rent-to-Owns, and Subject-To deals. She started investing at when she was 21 years old and has been crushing it now for over 20 years. She has for published books, been on HGTV, was featured in the millionaire Real Estate Investor and the Millionaire Real Estate Agent, both by Gary Keller. (The owner of Keller Williams Realty) She isn’t trying to sell you guru abilities, she is actually teaching you.

Here is the segment when Wendy was on HGTV Talking about real estate? values in the Detroit area…

This book is actually Wendy’s complete system of how to buy and sell real estate using the creative techniques of lease options and subject-to’s. It is one of the best reads on Lease Options period. It has more information in it than many Lease Options and Subject To courses that cost big money!

Wendy Patton and Justin Ryan (One of Wendy’s Partners and a cool dude) wrote this one. This is also a MUST read.
How You Can Become Financially Independent by Investing in Real Estate

A few years ago, even reckless real estate investors could still make money because the market was booming. But many markets have softened, and making a profit isn’t as simple as it used to be. However—with the right strategy and long-term thinking—there is still plenty of money to be made in real estate.

Here is the back cover from the book…
If you’re willing to look outside your local market, you’ll discover emerging markets that are booming. And there are also smart investing strategies that work especially well in slowing markets. You can do it! You just need the new rules and wise tactics you’ll find in this practical, profitable guide:

Invest in up-and-coming, high-growth emerging markets
Learn the powerful strategy of market-timing
Use lease options to get more for your money
Learn creative strategies to engineer hands-off investments
Find foreclosures and other hidden bargains
Invest in bargain-rate new construction projects

There are great deals hiding in every real estate market, and this book makes finding those values easy. Whether you want to locate the next up-and-coming growth markets, or find creative ways to finance your investments, Making Hard Cash in a Soft Real Estate Market is a savvy guide to investing for anyone who wants to play it safe and profitably.

Wendy’s other 2 books are more for buyers, sellers, and traditional real estate agents and you can check them out here

In this video she shows you how to call Realtors in your area. These calls were made in New Jersey. She breaks down how to qualify Realtor listings and educate Realtors about creative selling techniques anywhere in the country. The language that Wendy uses is extremely important. Before I learned the language she uses I uses to call real estate agents all the time and get shot down. Her style allows you to turn the table and get the real estate agents open to something more creative than the traditional sales they are used to.

Wendy is an awesome person she left me take my video camera to get some inside footage for you. Here is over 35 minutes of class time boot legged(not really) from Wendy Pattons’ Buying and Selling Real Estate on Lease Option Boot Camp… People paid thousands of dollars for this boot camp, and you are getting a taste of it for free!

If you are looking to invest in real estate using creative techniques like lease options, rent-to-own, or subject-to’s, this is some of the best info!

Real Life Real Estate Investing Q & A What To Do When Your Can’t Find a Buyer for Your Wholesale Deal

jz — Thu, 02 Jul 2009 03:19:43 +0000

Q: This summer, I put a “junker” property under contract for $7,000. It had an “after repaired” value of $45,000 and needed about $12,000 in work. This seemed like a classic wholesale deal, but I was unable to find a buyer at $10,000 before my inspection period ran out. I chickened out and exercised a contingency to get out of the contract. I’m very sure of my numbers and I’m sure this would have been a great deal for someone at $10,000. That lost profit has been haunting me for months. What can I do next time? B.F., Cincinnati

A: As I see it, you have two separate problems here. First, you don’t have the resources to find a buyer quickly. Second, you don’t have any strategies for buying or controlling your great deal if you didn’t find a buyer right away. Let’s look at these problems one at a time.

When a wholesaler offers a deal where a buyer can purchase and renovate a property for an investment of less than 50% of the value of the property, and that wholesaler can’t find a buyer for that property, one of four things is happening. One possibility is that the property is in an area so bad that buyers don’t want to deal with. If other buildings in the area of yours are mostly boarded up, or the area is extremely unsafe or has a reputation for open drug and gang activity, finding a buyer can be difficult even when the numbers seem to work on paper.

The second possibility is that your estimates of the value or cost of repairs are badly wrong, so that the deal is not as good as you present it. This mistake is sometimes caused by overlooking an incurable defect in the property itself that makes it significantly less valuable than your comparable properties. Examples of this kind of defect might include a house sandwiched between industrial properties, or a terrible floor plan, or the only concrete-block bungalow in a neighborhood of brick Tudors. Fortunately, these mistakes don’t usually hurt you in the long run, because your potential buyers will quickly enlighten you as to the reality of the situation. You then have the opportunity to enlighten your seller, and renegotiate or get out of the contract through your inspection or partner approval clauses.

The third possibility is that you did not leave enough time in your inspection period to locate a buyer and give him time to inspect the property and make a decision. If you’re working with the right kinds of buyers – that is, experienced investors and rehabbers with cash - this is not a particularly lengthy process. Still, a minimum of 10-15 days is a must.

The final – and most likely – possibility is that you have neglected the very important task of creating and maintaining a good buyer’s list. A professional wholesaler does NOT depend on “finding” a buyer to make a profit on a particular property. Instead, he works hard to identify potential buyers before he’s ever found a property to sell to them. By networking with investors and rehabbers, he learns who’s a cash buyer, what areas and types of properties they’re looking for, what their exit strategies might be, what their requirements and pet peeves are, and how fast they can close. He gathers this information and keeps it where he can get to it when he needs it – that is, when he has a deal to sell them. By having a list of potential buyers, and knowing it well, you’ll know to whom the property will probably sell before you even get it under contract. At that point, it’s simply a matter of calling the right people until you get the answer you want.

Occasionally, matters conspire to put you in a position of having a great deal – but no buyer – despite your best efforts. This is where your real estate education comes into play. If you have the knowledge and resources to get these properties purchased and/or for getting your closing date delayed, you can still make these deals fly.

Tools you might use include a partner or private lender who can come up with the cash to close very quickly. Once you own the property, your exit strategies are no longer limited to a quick flip; you could retail the property or offer it for sale with owner financing. Another strategy might be to negotiate short-term seller financing or a “split funds” deal where you pay part of the purchase price now and part in 90 days. In wholesaling, as in the rest of the real estate business, knowledge is the key to profits.

Reprinted from the Real Deal, a monthly newsletter for Real Life Real Estate Investors with permission of Vena Jones-Cox. Get a free 3-month trial subscription by logging onto www.regoddess.com. One per household, please.

The most up-to-the minute info about how to earn 6 figures wholesaling in ‘09

jz — Mon, 22 Jun 2009 12:22:37 +0000

Yeah, 2 Years Ago

I Was Just Another Broke Dude from The Dirty Jerz,

But I Was Smart Enough to Listen to What

Vena Jones-Cox Had to Say…

She told me that the way to go from broke to successful in a few short months was to WHOLESALE properties.

Then she taught me how to do it right, and now I’ve gone from practically bankrupt to owning my own house, running my own business, traveling all over the country, and having all the spare time I need to work on the best website ever, REITVSHOW.com!

I’ve been to a lot of other gurus since then, but I ALWAYS come back to Vena, because she’s the best. She’s real, she’s experienced, and she tells it like it is

So on Tuesday June 23rd at 9 p.m. EST, I’m Interviewing

The Real Estate Goddess Herself

About “How You Can Earn 6 Figures Wholesaling in 2009″-

and You can Learn Along with Me Just By Registering Here: https://www2.gotomeeting.com/register/352976058

You need cash? Vena will show you how to get it, and fast.

You like real, down-to-earth teaching? You’ll get it.

In this webclass, just for REITVSHOW.com fans, she’ll show you:

The newest best ways to get calls from motivated sellers
The effect that the influx of foreclosures and bank-owned properties has had on the wholesaling business
How to build a real wholesaling BUSINESS, where other people do the day-to-day “work”, while you just focus on making the money!
PLUS answer all your questions!

Trust me, You NEED This Info,

But You MUST Register to Get Into This Awesome Class

At https://www2.gotomeeting.com/register/352976058

I’ve never done a webclass before, because I’ve never known another expert who can teach like Vena (and I wouldn’t waste my time or yours on crap).

Go to https://www2.gotomeeting.com/register/352976058 now to register, and I’ll talk to you on Tuesday at 9 pm EST!

Jon

P.S. Remember, this class is completely free, and you don’t even have to dial a long-distance number if your computer has speakers! Be there! That’s right!

Best Webclass EVER Tuesday–How to Wholesale Real Estate!

jz — Wed, 17 Jun 2009 14:25:41 +0000

I Made $34K on My Very First Deal Using What Vena Jones-Cox (AKA the Real Estate Goddess) Taught me…

I don’t care where you live, you’re totally missing the boat if you aren’t wholesaling properties. You get quick cash with no money down, no rehab, no tenants-wholesaling rocks!

NO ONE Knows as Much as My Mentor About Wholesaling…

Forget Those “New Kids on the Block” and Listen Up to What She Has to Say!

These guys who’ve been wholesaling for 2 years and done 20 deals? Forget ‘em. I’ve learned from all the big gurus out there, and Vena’s the ONLY one I listen to when it comes to wholesaling.

She’s been in the business for 20 years, and she’s done hundreds of deals in up markets and down markets. She’s honest about the pros AND the cons, and she’s made me over $100,000 in just the last year.

That’s Why I’m Hosting My First Webinar EVER- JUST for REITVSHOW.com Fans

Tuesday June 23^rd at 9 p.m. EST

and You’re Invited…

I NEVER thought I’d do a webinar, but when Vena said she’d spend 90 minutes teaching my subscribers the inside secrets of earning 6 figures wholesaling RIGHT NOW, RIGHT in your own backyard (that’s right!), I said “hell, yeah”.

Here’s what she’s going to cover:

How to choose the right deals, so that they sell quickly and for top profit-and why you should focus on different properties today than you did 5 years ago
How to make the right offer every time, so that you can earn $5-$10,000 on each deal
How to find buyers for your deals before you even have a deal
How to sell a property you don’t even own, that you have invested NO money in, and that you haven’t done a bit of work to
And so much more…

I Told Vena that You Guys are Starving for this Info,

So Don’t Embarrass Me!

Register for the FREE Webclass by Clicking Here:

https://www2.gotomeeting.com/register/352976058

She’ll be giving away info with both hands, and answer your questions, too.

Go https://www2.gotomeeting.com/register/352976058 now to register, SET A REMINDER TO BE ON THE WEBINAR AT 9 ON TUESDAY, and I’ll talk to you then!

Jon

P.S. Wanna see a preview of the kind of info Vena gives? Check out my archived interviews with her at Vena Interview . On the webinar, you’ll get the whole scoop on making a 6-figure income wholesaling real estate in 2009!

P.P.S. THAT’S RIGHT!

Vena Jones-Cox: How to Make Successful Offers on REO’s – Episode #32

jz — Thu, 21 May 2009 01:38:16 +0000

In this episode Vena Jones-Cox rocks it as always as we talk about how to make offers that will actually get accepted on REO’s. Vena is an super successful real estate investor who coined the term “certified unemployable” (Isn’t that right Dave Alexander Vena is one of my best friends and my personal mentor.

By the way if you did not come Vena’s Wholesaling Academy in NJ then you might want to start making plans because I hear she is having one in Cincinnati in August! More info to come later. I will definitely be there. You can check it out here http://www.reitvshow.com/recommends/WholesalingAcadmyCincy09

Vena Jones-Cox: How to Make Successful Offers on REO's – Episode #32

jz — Thu, 21 May 2009 01:38:16 +0000

Why Title Insurance Can Kill Your Deal and How Your Title Agent Can Save You – Episode #19

jz — Tue, 21 Apr 2009 05:21:53 +0000

Title Insurance Policies

What are Title Insurance Policies – Do You Need Title Insurance?

By Elizabeth Weintraub, About.com

To understand title policy insurance in America, let’s look at chain-of-title and how title companies search the public records. Title insurance companies aren’t really concerned with where dinosaurs once roamed, whether our ancestors trekked across the Bering Straight or where American Indian tribes settled. Title searches begin with when the United States government stole the land, I mean claimed it — from the U. S. patent — and move forward from that point.

Because humans are involved in recording deed transfers and plotting land parcels, a lot can go wrong. You want title insurance because it will protect you against defects and human error.

Property Searches and Public Records

Property transfers were first recorded alphabetically in separate Grantor and Grantee books.
The books are heavy to lift and dusty.
County records are often maintained at local courthouses or the Clerk of Registrars.
Today, most records are stored on the computer.

Division of Land

Early deeds involved large chunks of land known as Townships.
Townships contain 36 sections and are six miles by six miles.
Sections measure one mile by one mile and contain 640 acres.
Half of a section is 320 acres.
1/4 of a section is 160 acres.
1/4 section of 1/4 section is 40 acres.
An acre is 43,560 square feet

Title Search Basics

Title searches start with the most recent deed, searching the grantee’s name (the person now holding title) backwards in time, until the deed when the grantee acquired the property is located.
That grantor’s name is then searched backwards in time in the grantee’s book to find when the grantor acquired title as a grantee.
This process continues, and over time, the property description involves larger and larger parcels of land.
Eventually, the searcher finds the U. S. Patent.

Other Factors Affecting Title

Deeds establish chain-of-title, but sometimes those chains are broken. In addition, title searchers also look for reconveyances (proof that the encumbrances are paid off), and they look for easements, rights-of-way, CC&Rs, other elements affecting title to the property. Here are more records that are searched to piece title together:

Marriage records
Death certificates
Tax sales

Title Insurance Coverage

Depending on the title company, consumers can choose among a variety of options, but the top three choices are Owners, Lender’s and Extended Coverage.

Basic Owner’s Title Policy Coverage:

Clear title to the property
Incorrect signatures on documents
Forgery, fraud
Defective recordation
Restrictive covenants
Encumbrances or judgments

Basic Lender’s Title Policy Coverage:

Mechanic’s liens and unrecorded liens
Unrecorded easements and access rights
Defects and other unrecorded documents

Extended Owner’s Coverage

Building permit violations from previous owners
Subdivision maps
Covenant violations from previous owners
Living trusts
Structure damage from mineral extractions
Variety of encroachments and forgeries after title insurance is issued

Who Pays For Title Policy Insurance?

This depends on your local custom.
It can differ from county to county, but it is also negotiable in the purchase offer.
Sometimes sellers and buyers split the fee for the owner’s policy.
Typically, the buyer pays for the lender’s coverage.

How Long Are Title Policies Good For?

Forever, theoretically. If you are planning to resell the property within a couple years, ask your title company about “binder” coverage. Most companies will sell you a binder policy for 10% more. A binder is good for two years, often can be extended beyond that time, and the fee charged for the new buyer’s policy will be the difference between what you bought the property for and the price at which it sold. In other words, you will get a credit for the amount of coverage you purchased under your own Owner’s Title policy.

How Often Are Title Policy Insurance Premiums Paid?

Once. The fee is due when you buy. You will never pay it again. Title policy insurance is the best insurance policy you can ever buy.

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