Why Real Estate Investors Need a Title Company

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15 Feb Why Real Estate Investors Need a Title Company

As a real estate investor, one of the key moves you can make to protect your interests and streamline your business growth is partnering with a title company. While you might not need this valuable real estate investing team member when learning how to begin investing in real estate, a reliable title company can be a valuable player on your team as your portfolio grows.

What does a title company do? Why is this an important relationship when building a real estate portfolio? Here are a few tips for real estate investing and why serious investors should partner with this valuable resource.

What Is a Residential Property Title?

A residential property title is a legal document that outlines the ownership of a piece of real estate. This document includes essential information like the names of the current and past owners, a description of the property, and any outstanding liens or encumbrances on the property.

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In order to close on a property, the title must be clear of any claims or liens. If there are any errors or omissions on the title, it’s the title company's responsibility to correct them before closing.

What Does a Title Company Do For Real Estate Investors?

A title company has a few key responsibilities when working with property investors.

First, the company will conduct a title search on the property in question. This is done to make sure that the seller is the legal owner of the property and that there are no outstanding claims or liens against it.

Your title company also provides an insurance policy to the buyer. This policy protects the buyer from any financial losses on the real estate investments if it’s later discovered that there were errors or omissions in the title search.

Finally, the title company will act as a neutral third-party during the closing process. This means that they will handle all of the paperwork and ensure that both the buyer and seller meet their obligations.

Why Investors Need Title Companies

So, why is it important for an investor to partner with a title company when investing in real estate, like rental properties or fix-and-flip investments? As you buy and sell more properties, this partner helps in the following ways.

1. A Good Title Company Can Help You Grow Your Business

If you’re serious about building a long-term real estate investing business that generates significant wealth, you need to have systems and processes in place. A good title company can help you streamline the closing process, making it easier and faster to close on properties.

2. They Can Help Protect Your Investments

As an investor, buying and selling a real estate investment can be a risky business at times. You never know when something might go wrong with a property—for example, if there are undisclosed liens or title issues.

A good title company will work to correct any errors or omissions in the title before closing, helping to protect you from making the costly mistake of buying a bad property.

3. They’re a Neutral Third Party

When working with buyers and sellers, negotiations can often get heated. Therefore, it’s crucial to have a neutral third party who can handle all of the paperwork and keep the process moving forward.

4. They Can Help You Save Money

A good title company will also work to get you the best possible price on your investment property insurance policy. This can help you save money over the long term, which can be used to grow your business even further.

5. They Can Help With Financing

If you’re looking for financing for your investment properties, a title company can help you find the right lender. They can also act as a middleman between you and the lender, helping streamline the process.

Choosing a Title Company

Now that you know why it’s important to partner with a title company when investing in real estate, it’s time to choose one.

Smiling businessmen shake hands greeting getting acquainted at meeting in office

There are a few things you should look for when choosing a title company, including:

  • A company with experience working with investors.
  • A company that offers competitive rates.
  • A company with a good reputation.

You can also ask other investors or your real estate investing team members for recommendations. Once you find a few companies that meet your criteria, be sure to talk with each one before making your final decision.

Privy Helps Real Estate Investors Streamline the Process for Growth!

Partnering with a good title company is an integral part of being a successful real estate investor. They can help you streamline the closing process, protect your investments, and save money on financing and insurance. When choosing a title company, do your research to add a reliable partner to your REI team.

Privy's platform also helps property investors streamline the process of finding new properties in a real estate market and making great deals! When it's time for your next investment property, our software delivers new opportunities and investor insights directly to your inbox. Talk with our team to learn more about the Privy Advantage!

Build your REI Team for success with our free tool, "Assemble Your Real Estate Investing Team: A Worksheet!”

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