1407: Q&A on Title
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00:16
Welcome to Growing empires hosted by real estate entrepreneur and trusted Investment Advisor Jennifer de Jesus’ Growing Empires provides insight to building wealth through passive income producing real estate investments for those who want to build and manage a more profitable real estate portfolio.
00:32
Thank you for tuning in, we're going to get right into our question and answer segment as per the usual,
we've received quite a number of questions by our listeners, and they're very good. So I can't wait to
jump right in. Question number one. I know you own a title company. But I'm curious what made you
start one? And what do you feel that they do differently than the others? That is a great question.
Actually, it's not something I get often asked. So I appreciate the question. The reason that I started a
title company was because I was trying to focus on building services and systems that surround
investing, successful investing. And because I have been in the real estate business for a decade and a
half, I have had quite the experience dealing with all sorts of title companies, mortgage companies and
other partners to a transaction. And what I mean by that is, you know, when you're helping an investor,
buy an investment property, it's not just you and the investor, right? It's you and the investor, and then
the agent on the other side, which is usually the seller and the sellers agent. And if your buyer is getting
leverage or getting financed from a bank, they are going to be involved. So you've got the lender, and
the underwriter for the bank. And then you have the title company or the attorney that would handle the
closing and facilitate the closing. And, you know, there's there could be other people besides that, but
those are the traditional amount of people involved in a transaction. So what I got to learn very quickly
is that the only way that I can control my clients experience in the whole transaction is to control the
whole transaction. Meaning that, you know, if we were to facilitate title insurance and title services, title
abstract, we could control their experience. You know, in some respects, I expect that maybe in the
future, we're also lending money for the same reason, but I got so frustrated, you know, coming from a
customer service background, I realize how critical customer service as a whole is not only just for
transaction, but for a lifelong relationship business relationship that you have with this client. And
because of it, investors are not like, one time buyers that you know, that sells the house they live in,
right. So they're not, they don't just buy one and live there for five or 10 years, and then maybe buy
again, in the future, they buy these properties, and they keep buying. So these are people that I need to
come into contact with on a regular occurrence. So I found it really necessary to be able to control the
experiences that they were getting. The other thing is, is that we deal with a lot of out of state investors.
So the one thing that the investor will not have coming to us is any kind of network or any kind of
relationship with anybody local to the transaction. And you know, that title company is, is literally the
protection between a good deal and a really bad deal. And, you know, I think people don't pay attention
to how critical title insurance and the abstract of title is in the context of what you're doing. But when
you're spending hundreds of 1000s of dollars, maybe in some cases, your life savings and or the
largest investments that you will ever own,
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it is really critical that you are making sure that you are protected. And that title insurance and that
abstract of title, that title search that they're doing is that critical component. And if it's not done or it's
done by somebody that is not as experienced or not as seasoned, you're going to run into problems,
not just in the actual initial transaction, but long term issues that could prevent you from selling the
property down the road. And and I just find that that is a risk to great to allow any of my investors to
actually take So partly, you know, my choice to open a title company was to have some control over the
experiences because not all title agents are created equal. I found people that don't follow up and they
don't do their due diligence and they just they're just terrible customer service people and
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For my clients that are out of state, you know, they just don't want to be hassled with nonsense, they
want a title company that's going to work for them. Because after all the time you pay the title company
as the buyer, you're paying the majority of the fees to the title company. So if I am the client of the title
company, I expect a certain level of service. And I was just not consistently getting that as a matter of
fact, I was watching clients, time and time again just have terrible experiences terrible service. And I
just was not satisfied with it. So I started the title company, because I wanted to control that. You know,
the other critical component is the fact that this is your best investment. This is where the most amount
of money is spent for any one person is in real estate as a whole. And whether you're buying a home
for yourself, or you're buying a home, you know, as an investment property, this is a critical component,
right? You would never buy a brand new car without car insurance. Well, you should never buy a
property without title insurance. And it's not just as simple as somebody signing an endorsement or a
binder saying, hey, you've got insurance, you need to make sure that that title agent did the due
diligence, and they have followed that search and that they have dotted every i and crossed every t
because if they didn't, and if they made the slightest mistake, you could not be able to sell that property
in the future. Or you could have bought a bad asset, meaning that you don't actually really own it,
because the transfer was never illegal to begin with. And nobody wants to be in that situation. So why
did I open a title company because I wanted to make sure that my clients continued to have the
exceptional service that they expected from me. And I wanted to continue to provide that. And number
two, I wanted to make sure that I had the best of the best, most experienced title agent in the industry
that could make sure that every I was dotted, every T was crossed and that my clients were protected.
And that's why I decided to open that title company.
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For the other part of your question, what do we do differently? And I think I just explained that but I'll go
a little bit more into detail. What we do differently is that Michelle, the title agent, Michelle Bechtold.
First of all, she's a rock star, she's been in this business for two and a half decades, far longer than I've
been in real estate. And she is the most knowledgeable, most experienced title agent I have literally
ever worked with. It took me forever to find her. And I was so lucky to be able to bring her on and bring
her to the team. And she's been with me since the inception of seal abstract. And I couldn't be more
proud of the partner that I have on my side. Because she just really is the best of the best. There is not
one person in the industry that I have literally ever met or have ever done business with that I think is
better than she is she goes out of her way to make sure that our clients are cared for that every detail is
checked. She makes sure that if she questions things, she gets the attorneys involved. But she is
diligent, she is religious in her her methods and how she does that she is extremely highly rated. I you
know, I don't know if you know this, but you know, title companies have to go through audits, right is the
best way to describe them and all underwriters audit all of our files. And you know, to have a plus plus
plus rating is like having a better business bureau ratio. And every single time from the time of inception
to today, I can tell you that she always gets an A plus plus rating. She never misses a beat. And we're
just so fortunate to have her. And that's why I opened a title company, I really wanted to provide that
extra layer of protection from somebody that I could trust to be very diligent to protect our clients and
protect their interests. And, you know, really build that relationship, that foundation with the underwriters
that are ensuring the transactions and just really make sure that our clients got the best of the best and
that they could not get it anywhere else and I am confident. I am more than confident that we deliver on
that service every single transaction every single day. But great question.
09:14
The episode will continue in just a moment.
09:18
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10:16
Next question is who chooses the title company? And how can you avoid dealing with a bad one?
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Great question again. So the buyer is always the one that chooses the title company. And if you're the
buyer, how you avoid choosing the wrong one is number one, I would do your own research, I would
talk to the title agent, I would talk to people that are going to refer you to the title agents. So the last
thing you want to do is go to the yellow pages, or the white pages, whatever they are today, go to
Google and just select one, you just never want to do that. You really need to get a reference or a
recommendation from somebody in the industry, a lender could be a good reference, your real estate
broker or agent can be a great reference. But you want to make sure that if they have stake in that
referral, that you know about it, it's required by the state of Pennsylvania to disclose this type of stuff,
any kind of business relationship. So you want to make sure that they're not just referring you to a title
company, just because they make an extra buck on it, you want to make sure that they are legitimately
going to stand behind the title company, in their performance and their services to you. But do your own
due diligence and make some phone calls and ask about the chain of title and ask about, you know,
some of the recent fraudulent instances and things that have happened and just see what you know
what this person has to say on the other line. If you can't get a recommendation or referral from
somebody that you can trust, then I would take the extra initiative to make some phone calls and really
do some research on your own. Again, even your local attorney, maybe your accountant, maybe your
insurance provider for like your dwelling policies, they could provide you a good reference as well. But I
would definitely do that. And then after you get that reference, also check their Google reviews and
their Yelp reviews and see what other consumers are saying about them. But don't be afraid to call up a
title company and say, Hey, how many claims have you had recently? And what have they been about?
And see if they're willing to answer those questions for you, because anybody worth their weight in gold
in this industry is not going to be afraid to talk to you and knows exactly what you're asking. So don't be
afraid to ask questions. If you are a seller, how do you avoid dealing with a bad one that's a little bit
more tricky, because you're not actually the one picking the title company. But I have definitely
educated my sellers on requesting a use of a specific title company. So for example, still abstract to the
point that it may not be worth it for them to take a deal or take a specific offer or buyer if they're going to
have this hassle and potential issues down the road. You know, when a seller decides to sell a
property, they're selling the property, they want to end, you know, their relationship with that property.
And if you pick a bad title agent, or the buyer picks a bad title agent, you could be the receiver of issues
down the road that are not not only just potential fraudulent issues, but you could also be the victim of
other issues that are present with transfers of title. So if you're the seller, one of the things that I could
suggest is that you request, you know, a certain use of a title company. And if they're not willing to do
that, then maybe you don't accept their offer. Because I think that's a really that's just as critical as the
price that somebody's willing to pay for your home is making sure that the title transfer and everything
is going to go seamlessly. Okay. Great questions. Next question is What is your opinion on buying
property from a sheriff sale or foreclosure sale? I actually personally think it's a great move. So great
question. You know, I think that in any kind of changing market, especially like one that we're in today, I
think it's really critical to be resourceful and to find other opportunities. Now, the challenge was Sheriff
sales or and or foreclosures is that the auctions are something you have to attend usually in person,
they require a lot of due diligence on your part. And you have to be you have to really have a
partnership with a good title company. Otherwise, you're really risking a lot of a lot of potential issues.
And what I mean by that is, before you would ever buy a property from a sheriff sale or foreclosure, I
highly suggest that you have a preliminary search done. And if you have a good relationship with a title
company that does a lot of transactions for you, they'll be happy to pull a title search for you to let you
know what type of liens are on the property or in conferences, any kind of deed restrictions, just things
that you would need to know that you may not know by just looking at records or googling the
information. The other thing to keep in mind is that you know, there's this kind of this mantra of, you
know, buyer beware, right. So it's it's your responsibility to always do your due diligence. You're not
going to have a good case to go back and say, well, the bank didn't disclose or the seller didn't
disclose. I mean, that would be a really hard thing.
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To overcome, so you're gonna want to make sure you do a title search, you're gonna want to make
sure you do your research on the property. One of the challenging things with Sheriff sales and
foreclosures is sometimes you're not able to access the property. So for example, if they're going to go
to auction, and let's just say, for example, there's somebody still living in the property, because if you're
going to a foreclosure sale, that property hasn't been foreclosed, the option is actually the thing that
creates the foreclosure. So there could still be the borrower or the person that is defaulting on their
mortgage still living in the property, the bank is only looking to transfer their risk and transfer the debt
that's on the property and get essentially a payoff for it, they are not looking to deal with the occupant.
So a lot of times in a foreclosure auction, the occupant still lives there, unless they've decided on their
own to leave ahead of time. So you could potentially be dealing with somebody you have to evict, you
could be dealing with different types of liens, and not every lien is transferable from owner to owner. But
that's again, what a good title agent will help you identify as what liens could potentially be, you know,
your responsibility when you take on the property. And if there's any deed restrictions or things like that,
easements, different things that would affect the ownership and the rights to use the property in the
land. Those would all be things that a title agent would really be able to help you with. So before you
ever go to buy anything from a sheriff sale or foreclosure, make sure that you've had you've done your
due diligence, if you can get access to the property, and you can go in and actually do an inspection, I
highly recommend that you do that. That's not always the case. And a lot of times they'll say Don't
bother the occupant, but that doesn't mean you can't drive by and walk around the property or
something of that nature. So I definitely think share sales and foreclosures are are good options for
you. If you have no experience, make sure you seek the help of an experienced broker or a real estate
agent. And attorney could also help you with this. A title agent could definitely help you with this. But
you're going to need a team because it does take a lot of time and a lot of energy to source properties.
And you have to look through a lot to find that needle in the haystack. That makes a lot of sense. So
before you go and put the effort into trying to buy properties from auction, specifically Sheriff sales and
foreclosures, just make sure that you build your team of reliable consultants to help you identify the
best properties to buy from those auctions. Great questions. Last but not least, what do you advise a
buyer to do to avoid being a victim of fraud? Again, just a really, really great questions this week. So
appreciative how to avoid being the victim of fraud, make sure that you have a good reputable Title
Company Number one, because fraud happens when people miss things. Okay, so for example, a title
company misses that the seller that is trying to sell you the property is not the legal owner of the
property. So they're essentially fraudulently trying to sell for whatever reasons maybe a dispute
between spouses you know, that are getting divorce maybe dispute between kids and and parents, it
could just be a flat out scam, somebody's just trying to take money. But that's one of the ways that you
avoid being the victim of fraud is so critical to have that experience title agent, because there's so many
ways that fraud can happen wire fraud, ownership, fraud, identity fraud, I mean, there's so many
different things. So make sure you have a very experienced title agent to work with you. And it's not a
bad idea to have an attorney also represent you if you don't have a relationship in that state with a good
title agent that you may be investing in. But that's how you do and ask a lot of questions. You know,
when you get your title commitment, and you get a copy of the deed and you know, read it actually go
through it, ask questions ask asked to review the title search that came back and just see if there's any
things that you're noticing that you're not sure about. But really do your own research and then really
spend some time talking to your title agent or your attorney and making sure that again, every i is
dotted and every T is crossed. And that's the best way to help you avoid being a victim of fraud.
19:19
Well, I hope you enjoyed this episode and these great questions. And this concludes the question and
answer segment for season 14. And until next time, take care.
19:32
For more information about how Jennifer can help you plan, develop and manage a strong real estate
investment portfolio, visit growingempires.com