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The "Investor-Friendly" Title Company - Part 3

            The bottom line is that all title companies are “investor-friendly” if you know what you are doing and can explain to the title company how you believe the deal should go forward.  In the course of my transaction work for IRA account holders who are funding deals, I write closing instructions, a detailed 2-to-3-page letter to the title company explaining, from the lender’s perspective, how this deal is going to happen and what documents need to be signed in what order and by whom so that the identified buyer can buy from the identified seller.

            Having a title company be investor-friendly is all about communication.  You must take the time to put it all in writing that others will understand.  All too often, however, we think someone else is going to do the communicating.  You may have heard me say that to be unclear is to be unkind.  On my laptop, I have a sticker that reminds me to “abundantly communicate” and make sure everybody has been informed of any changes and adjustments.  I then “backbrief”, which lets me know that communication has actually occurred.  I have lost track of how many times someone has admitted that they “forgot to tell the title company that”.

            Clear communication with a title company begins with the most important, fundamental document:  the purchase and sale agreement.  That document will be used by the title company to open a file and ultimately open escrow.  The purchase and sale agreement will lay out the terms of the deal including who the buyer and seller are, how much is being paid for the property, how the purchase is being funded, and, most importantly, when the sale is going to close.  I honestly believe it is a coin toss as to whether real estate agents or investors do the worse job when it comes to filling out a purchase and sale agreement or contract.  This is frustrating to a well-run title company because they have systems and processes in place for what they do when they receive a purchase and sale agreement.  If you have incomplete information as to the identity of the parties and their contact information, it makes it hard for the title company to contact people to get the necessary details regarding that transaction.

            To help your title company be investor-friendly, there are two things you can do.  First, take your time and fill out the purchase and sale agreement from the perspective of someone who knows absolutely nothing about the deal.  They should be able to read that document and have all the information necessary to understand exactly who is buying, who is selling, what is being transferred, and how and when that will happen.  Secondly, write out your closing instructions.  What are your expectations and understanding of the deal?  Make that clear by overcommunicating in writing to the title company, remembering that when you overcommunicate everything you are thinking, you are being kind to them because your communication is clear.

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