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welcome to day four of our 30-day wholesaling challenge and in this video I'm going to explain how title companies work and how closings actually work and I'm going to go through details on cost structures how it all breaks down and if you've never done a deal before this is the one you definitely want to watch but before I get into it make sure you do me a favor smash that like button hit the Subscribe notification button so you can continue to receive the rest of the videos in this 30 day challenge so a title company what is the real purpose of a title company just to handle your closings yes and no the reality of a title company is it is a service and their main business is actually selling insurance it's called title insurance now title insurance is there to protect both the buyer and the seller in the event there is a dispute in the title hence the word title insurance it mostly protects the new buyer say you paid three hundred thousand dollars for a property and there is something fraudulent on the title there would wind up being a lawsuit suit and that title policy protects you up to the three hundred thousand dollars you purchase and honestly there's very few buyers that will pay close to top dollar without getting entitle Insurance because it assures them and honestly it induces them to move forward with the transaction so most real estate has an element of title insurance and that's where title companies really come into play so number one title companies offer a simple service it's to help you close two parties on a real estate transaction they are licensed and regulated by the state in which they operate in and most title companies can only do closings within that specific state that they're registered in a lot of people think the title company is unbiased so whoever picks the title company they work for both parties in theory it's correct but the reality is whoever hires the title company just like you would hire a lawyer is honestly going to represent the best interest of the person that hired them it's the person they have a relationship with them and they can give you a lot of information on a transaction to make sure you are completely protected and so it is brutally important that you select your title company to do your wholesaling business don't ever use somebody else's Title Company because you're not going to get an unbiased meaning if you use their title company that title company is going to look out for their clients interest and not so much yours I've seen it happen over and over always make sure you choose the title company when it comes to wholesaling this is non-negotiable so let's talk about the steps so say you get a property under contract by this point you've already reached out to your title company and set up a relationship so the first step is to submit your contract that's signed by both parties to your title company the next thing the title company is going to do is pull the chain of title and basically it's a fancy word for they're going to research the title they have Underwriters within the company and they're going to look at the history of how the deed has changed from person to person and if there's any issues that's going to come up here and then that has to be resolved at that point The Next Step they're going to do is they're going to pull off payoffs for the property if there's any mortgages any outstanding debt on the property if there's any type of leans it's all going to cup up on these reports because you're buying a property and all these issues need to be cleared for the title to transfer with a clear title and title insurance so if you're buying a property and your new cash buyer they want to make sure it's got a clean title a clean title means the mortgages are being paid off all the liens are paid off and all the property taxes are squared up it's simple as that so once all the numbers are done depending on the type of closing you do sometimes there's prorations now a proration is basically if there's a two thousand dollar tax bill and you're halfway through the year then a thousand dollars gets credited towards the new buyer and then the seller gets debited a thousand dollars because they were there for fifty percent of the time so they owe fifty percent of the tax this is called the proration they do it with taxes sometimes they do it with rental agreements if you have a 30-day rental say it was three thousand dollars a month it's a hundred dollars a day and that's how they do a proration so don't let that word scare you off and then the other thing the title company does is they handle the recordings meaning they record the deed they record a satisfaction a mortgage if there's a mortgage and it's recorded they handle all that for you at your local County Courthouse so you don't have to go out there and do it yourself and guys that simple as most closings work and how title companies work so now you need to know how to go out and interview a title company that is going to be specific to your wholesaling business the reality is 97 of title companies are geared towards dealing with Realtors we are the exception not the rule so we need to find a title company that's okay to work with us so we basically ask them three simple questions and I want you to repeat these questions word for word let's get into it number one do you work with Real Estate Investors simple question listen to their answer how they Define their answer is going to determine if you're going to move on to the next question or not if it's an extremely negative answer move on they're not the title company for you and they've shown their true colors and saved you a ton of time question number two are you familiar with the assignment of contracts that's it just like that are you familiar with assignment contract this is a Technique we use in wholesaling if you want to learn how to do it go over to Freehold sling.com we teach it in detail we also teach it in this 30 day challenge that's basically simply you signing your contract over and getting a fee for it if they're extremely negative towards this question do not use them because that means they're uncomfortable with assignment of contracts and they really don't want to work with Real Estate Investors much less wholesalers if I get a positive response to the first two questions my third question is really simple can I get a list or an email of all your settlement fees for using your title company just like that because you want to get it on record the sooner you get the numbers the less they can play around with you most people have no idea what the cost of title insurances all the fees are and honestly just for that reason alone if you ask for it sooner than later they can't manipulate and play around with these numbers because you have an email you got to print out and you can hold the title company accountable for it so these three questions will easily suffice in qualifying if a title company is great for your wholesaling operations I want you to understand this you have to develop a very good relationship with your title company because they can literally make or break your wholesaling business they will assist with your buyers and your sellers they are an integral part of your team and you've got to make sure you have a super fantastic relationship with them because if you have a terrible relationship it's going to bleed in your business and you're going to lose deals so make sure you connect with them with these three questions do not try to go off the hook and ask crazy questions stick to these three questions and use your ears and listen to them and if you get a positive response on all three that is the title company you most likely want to work for for your wholesaling business so when it comes to Title Company fees there is two types of fees that you will become familiar with in wholesaling one set of the fees is extremely negotiable the others set in stone there's nothing you can do about it so number one is going to be your government and state fees these are completely non-negotiable these are going to be recording fees these are going to be documentary stamps and 10 changeable taxes basically any type of fee that is required by the state level or your county level in the county courthouse because they record any type of transactions of record for real estate and you'll see these fees some of them are a little pricey but you can't negotiate them so don't sweat them and guys at the end of this video I'll show you how you can actually get a copy of how to work with your wholesaling title companies I will actually have a PDF that you can connect with and I'll show you how to get at the end of this video so once you understand the fees that you can't negotiate don't waste your time on that because so many wholesalers try to negotiate recording fees and state fees the title company doesn't make any money off that they just pass along the cost now the second set of fees are what we call your closing or Your settlement fees and guess what guys these are highly negotiable so remember in your series of questions I asked you to get a list of settlement fees or closing fees from your title company this is where that list is going to give you complete transparency on how to negotiate the fees you can with a title company so the first fee is going to be your title insurance fee and to be honest with you it's not really negotiable so they set a set amount of number they sell a policy and the title company gets a commission off of it just like any other insurance salesperson life insurance health insurance property insurance it's the same thing on average they earn between 50 and 60 percent of that fee up front and they keep it as a profit for commission hence this is their main business called title company and they sell title insurance now after that I'm going to show you how some of these fees they can charge you search fees they can charge you lien fees they get all creative with these crazy names on these fees most of these are highly negotiable honestly a lot of them are just bsvs to jack up the profit level so be specific if they're going to charge you utility lien search ask for a report of utility lien search you'd be surprised a lot of title companies just give a phone call that's not really a utility lead search you could do that on your own and then the final one is the settlement fee and this is what they charge to do the closing now they already selling the title insurance they're making their money on that they're going to charge you some of these little BS fees there's not much you can do about it you negotiate them so I look at any search fees and the closing fee I look at in totality so I'm in the State of Florida it can range anywhere from 350 all the way up to fifteen hundred dollars I don't let a title company ever go over a thousand dollars and honestly it depends on what they're doing for me sometimes I do need their help but the reality is the more closings you do the more you get the title companies fees in writing the less they can negotiate on you my first 10 wholesale deals I noticed I had fees from 300 up to two thousand dollars until I started asking questions I didn't get these fees dialed in guys look at your search fees your bsvs and your settlement fees and try not to let them exceed a thousand dollars because it is a cash transaction it should be simple if you're being charged two or three thousand dollars and there's not an attorney involved you're probably getting ripped off by the title company because they know you don't understand their business I'm sharing you the secrets now if you guys really want to get all the detailed access and and you want to learn more if you go under our 30-day wholesale challenge in the flip with Rick plus section I will share this sheet with you and it goes in details the cost of the fees what you should expect it's going to be different state to state and depending if you have an attorney handling the closing but guys title companies are in essence your partner in your wholesaling business you need to have an excellent relationship with them but you also need to understand you're running a business and if you don't know about their fees you will be taken advantage of I want you guys to pocket as much money as possible while letting your title company making a healthy profit but not ripping you off so guys this is day four of the 30-day wholesale challenge remember if you want to get this sheet in detail on fees with your title company go over to flip with Rick plus I share it in grave detail everything you need to know and listen if you got value from this video do me a favor make sure you smash that like button you hit that subscribe notification button to continue to receive the most up-to-date information on our 30-day wholesaling challenge guys this is Rick Ginn and I'll see you soon [Music] thank you [Music]