Beth:
Hi, I am Beth with TB Properties Buys Land. In the last video, we discussed scam offer letters and we discussed the process of selling your bare land to a real estate investor so that you can determine whether they are indeed trying to scam your or if it’s legit transaction between you and a real estate investor. While I cannot speak for all real estate investors, I can speak on behalf of TB Properties Buys Land.
First, we talked about the property, getting the information, not giving too much information away, but getting the pertinent information that is needed so that we can offer you a quote on your property. Once a price has been determined and both parties are acceptant of the offer price, you need a contract in place to solidify the arrangement. If you think about a time in which you worked with a realtor, those contracts may have been 15 or even 20 pages long. Some real estate investors’ contracts might be even longer. Ours is one simple page. It’s very short, and we make sure that it’s understandable so that you don’t need to have a law degree in order to understand what our contract says. It’s very, very plain.
Within our contract we first identify the property: we state the assessor’s parcel number and the county and state where your property is located as well as the shortened legal description. You’ll find that both of these pieces of information will be on your tax statement. We identify you as the seller, we as the buyer. We state the closing date and the dollar value that we’re paying for your property.
After that, we call out the the terms of the sale. Here at TB Properties Buys Land, we cover all closing costs. What does that mean? Our contract explicitly states that we as the buyer, are going to pay for the following: we state that we’re going to pay for all the escrow fees, which include the buyer’s escrow fees, which are ours, and the seller escrow fees, which are yours. We state that we’re going to pay for title insurance. Typically, it is the seller that pays for Title Insurance but our contract states that we will pay for that as well. We also state that we will pay for the recording fees that go to the county where the sale is recorded, and if there are excise taxes, we pay for that.
The last of the terms that we include is a “cover your butt” clause. It is not in fine print but is stated very clearly that you, as the seller, will cover any liens against your property. Basically, if you have a lien against your property – perhaps if you haven’t been paying Home Owner’s Association (HOA) fees or POA fees, or if you have a mortgage against your property or someone took out a lien against it and we don’t know about it, we say that you’re going to cover that. Most of the time, the people that we work with, they don’t have a lien against their property or if they have a mortgage, they know about it and they tell us, and we know that the sale proceeds are going to cover that mortgage and they get whatever’s extra. Still, you can see how this is our “cover your butt” clause and that it is important.
The final piece is that we state where the sale is being closed through. Here at TB Properties Buys land, we’re always going to close through a title company. That means safety for us as the buyer and for you as the seller. Using a Title Company means that you don’t have to worry about the buyer’s check bouncing and you don’t get paid. You don’t have to worry that you’re going to lose your property that way. When we work with a Title Company, they’re going to tell us as the buyer that we have to send them certified funds. They’re going to expect a wire transfer from us, straight from our account into their account, or a bank certified check that is mailed to them.
Once those funds are in their account, only will they say that the transaction’s funded. They also need your paperwork which includes your signed and notarized deed and then they will need our paperwork as well. Most of the time Title will require what is referred to as a “wet signature,” in which they need an ink signature on paper to be overnighted and in their hands. We use a Title Company because we know that it will be a safe transaction for both parties and that they will make sure the paperwork is done correctly. The Title Company we chose will depend on where your property is located; we will select a title company that is licensed to transact in the county where your property’s located.
Now, if you’re from the area and you say, “You know what? I don’t like the title company. I’ve worked with them before. I have a favorite title company. Can we work with them?” Truly, it does not matter to us. We have never denied someone’s request to use a different title company. Most of the time the sellers we have worked with have not minded which Title Company we have selected but a few have specified and it has always been fine with us. Back to the discussion on the purchase and sales contract, all of this will be included and then we send it to you for review.
If you have questions, we ask you to reach out to us for discussion before signing. If you have additional questions after our discussion, always feel free to reach out to a realtor in the area, a real estate attorney, a friend who’s in real estate, or someone professionally who can answer your questions. Feel free to call the title company and ask them questions. You might ask them, “How is this going to work? Can you walk me through the step-by-step process? What if I want to close in person? What if I live on the other side of the world? How am I protected?” I want you to know that you always should feel as though you are entitled to ask your questions and get the answers that you need to move forward. Transparency is extremely important.
Hopefully that helps answer some questions for you. I’ll continue in another episode because this is already really long. Here at TB Properties Buys Land, we purchase vacant land for cash, we close through title, and we look forward to working with you. Thanks again.