When you find a motivated seller and you’re moving forward with the purchase of their home using my Niche2Wealth strategy, you’ll want to select a title company that can close “Subject To” deals. Not all title companies are familiar with this, so you may have to do some searching for ones that will work with you.
This part of the process can cause some people to experience anxiety, because they’re not quite sure how it works. Rest assured that it’s not as complicated as it seems, and after you’ve gone through the process once or twice, you’ll feel much more relaxed.
Be prepared with the necessary documents
When you’re going to a title company, they will be the ones preparing the paperwork for closing, including the title insurance, escrow instructions, and so on. You’ll be required to get title insurance, as this protects the title company and yourself.
What is Title Insurance?
You understand that insurance acts as protection, as in things like health or car insurance. Title insurance acts the same way in that it protects the home from preexisting title issues. Now, the home you want to purchase may have had several owners, but what if something went wrong in the past on that title? What if a previous seller wasn’t really the owner of that property? And, what if they find out and want to claim property ownership later?
Having title insurance means you and the lender are protected. For example, if you have an owner’s title insurance policy, and a previous owner moves to claim property ownership, you’ll be able to get back any equity you have in the home. This way, you’re not losing what you have invested into the home, assuming it has equity.
Gather your disclosure documents
With that in mind, as a business owner, you’re responsible to know what types of documents you need to have signed. Good news is that I give you a list of the documents in my Unlimited Funding Program material. This makes it much easier for you! In addition, I’m here to assist you with questions you may have along the way, as you may find yourself in a particular scenario and need some assistance.
Different case scenarios
When you’re buying a house “Subject To”, or using of my Unlimited Funding Strategies, you may encounter different case scenarios. Depending on the case, you’ll need different types of disclosures. Each state may have specific disclosures necessary, so it’s important to check your state laws.
Two disclosures you’ll definitely need based upon my Unlimited Funding Strategies are the:
- Do Not Sell Disclosure (Bank disclosure)
- Statement of Understanding Disclosure – this assures that the seller understands he or she is selling at a discounted price (because that’s what you want) and it protects you.
Be sure to give these to the escrow agent to get them signed.
Coming to understand better the various types of disclosures involved in purchasing “Subject To” properties will help you as you continue your journey toward real estate investing success. If it seems a bit confusing right now, rest assured you’ll get to know the ins and outs in no time.
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