Posted on: March 04, 2020
WI 376 | Title Company

The importance of working with the right title company cannot be overstated. Why? For starters, they can make or break a deal. In other words, they can determine whether you get paid or not.
With countless options available at your disposal, how do you choose the best title company to work with? That’s just one of the key questions today’s guest will provide an expert answer to!
In this episode, Wholesaling Inc’s newest coach Chris Arnold talked to Taylor Martinez, his director of closing. Taylor has helped Chris, and his company close hundreds of deals and is considered an expert when it comes to titles.
Taylor shared so many gold nuggets in this episode—from the things she looks for in terms of staff down to her philosophy when it comes to working with title companies, she covered it all.
Knowing how important finding the right title company is, there’s no denying this is one of those episodes you just can’t miss!

MARCH CONTEST ANNOUNCEMENT!
For the entire month of March, Wholesaling Inc is running a Ratings and Review contest! We’re going to fly out 3 lucky winners to Florida, paying for airfare and hotel, to spend two full days with Tom Krol!
Whether you are trying to land your first deal or scale your existing Wholesaling business, Tom is going to help you crush your obstacles and achieve your goals!
And the lucky winners will all be featured as guests on the Wholesaling Inc Podcast!
To enter, you must Rate and Review the Wholesaling Inc Podcast on iTunes (5 stars please:) and send a screenshot of the Review to Darrin at darrin@wholesalinginc.com.
3 winners will be chosen at random and announced on the Podcast in April! Good luck!

Why Choosing The Wrong Title Company Can Be Destructive To Your Business With Taylor Martinez

Episode Transcription

Before we get started with the show, I want to tell you about a very special contest for running for you, our readers. I am so excited. What we are going to do is we are going to fly down 3 people to spend 2 full days with me in Sunny, Florida, where we are going to review either your wholesaling business, your current business or we are going to work like heck to get your first deal.

All you’ve got to do to earn one of those seats is simple. It’s so easy. Go to iTunes. I want you to find the Wholesaling Inc podcast, and I want you to rate and review this awesome show that is changing many people’s lives. I want you to send a picture of that review to Darrin@WholesalingInc.com. Send a picture of that review, and we are going to choose three lucky people to come down to Florida and spend two full days with me. It’s going to be an awesome adventure. You can’t buy this seat. It’s only for reviewing the show. Thank you for your review. Hopefully, we get five stars, either way, I will see you very soon in Florida.

I’m excited about the topic and, even more, the guest that I have for you in this episode. What are we talking about? We are talking about the value of having the right title company and what it can cost you to have the wrong one. There are a ton of questions around title companies, “What should I be looking for in the title companies? Should I have more than one title company? What can I expect?” There’s a lot.

Why this topic is so important? It’s because title companies can determine whether or not we get paid. I’m sure everyone reading has maybe had an experience in which they felt the title company potentially lost them a deal, and that is the worst way to lose a deal. It’s one thing if we mess up, we can blame ourselves. If a title company does something, then it’s like, “That’s frustrating.”

The guest I have in this episode that I’m very excited about is my Director of Closing, who has been doing transactions and closing them out, coming up on a few years. She has processed, as a Closing Manager or as we say, Director, hundreds of transactions. There’s no one that I know around the country that knows more about the title from a wholesaling standpoint than she does, so much so that some of the top guys in the country asked to have individual conversations with her to pick her brain about how she does what she does. Taylor, I’m excited to hang out with you. Welcome to the show.

Thanks for having me, Chris.

Tell us a little bit about you. Where are you located? A little bit about you personally and on the business side so we can get to know you.

I’m located in Dallas. I live in Dallas. I have been closing for a few years. I started off as part-time with programming, then graduate to being the Closing Manager and now recapping. I’m basically the Closing Manager.

Not only are you the Closing Director. You also have a closing person underneath you that you help manage as well. It’s a two-person team, correct?

Yes, it is.

WI 376 | Title Company

Title Company: Having a diverse title company in different types of closings and different title issues is very helpful.

 

Let’s get to the meat. Let’s talk about title companies and pick your brain about everything that you know. One of the first things is location. Does the location of your title company matter?

Depending on what market you are in, whether that’s DFW, anywhere in California or whatever state, whatever location. Specifically, DFW has our title company local and has them know what’s going on and different things that are changing in the DFW area. Having plugs, let’s say, for tax information or certain people they can call to get us information faster. It’s always in your best interest to have your title company in the same market you are working on.

Again, you are emphasizing that for the access to information that a local title company gets versus one that’s not local, correct?

Yes, they are going to be more familiar or comfortable working within that market.

Are all title companies created equally or are there some that are “more investor-friendly?” Is that true?

That is true. There are title companies that are more comfortable on the retail side of things. They will do a couple of investor deals here and there but then you have your other title companies that are way more experienced and investor-friendly. They have tricks up their sleeve. They can help you with information maybe you are not familiar with.

For example, when we first started. I wasn’t too familiar with something called a blind HUD. The title company that we started with that was pretty familiar with doing investor deals schooled me on, “We can show basically your information on one HUD, and then the seller’s HUD, they won’t necessarily see how much you are making per se.” That saved us on a lot of deals because of the profit margin.

To define that, if someone newer is reading, a blind HUD is your ability to hide what you are making on a deal from the other parties involved, correct?

Yes.

To break that down, what you are saying is there are some title companies that are built to work retail, which is with traditional real estate agents and brokers. There are some that are built to work better with investors. If I’m new to the game and like, “How do I figure out the difference? How do I know whether a title company works more with agents or investors?” If I call them, they are probably going to tell me what I want to hear. How do you know which ones are investor-friendly?

You never want to put all your eggs in one basket. You always want to have multiple title companies.

You can ask them. For example, how many investors do they work with day-to-day? Are they familiar with blind HUDs? It’s simple questions like, “Do you disclose information about our assignments to your sellers? What kind of relationship do you have there? Do you have our back on that end or are you more toward the seller?” That is fine but we also want to keep a sense of confidentiality when it comes to that and the buyers that we bring in. Simple questions like that to screen your title company that will help a lot as well.

Another thing is diversity. A title company should have experience dealing with multiple types of closings. What does that look like? When we say multiple types of closings, what are we talking about in the sense of diversity? How do we identify that in a title company?

Again, it comes back to questions and screening the title company. Our title company, for example, is very familiar with retail transactions but they are also familiar with wholesales, assignments, and dealing with multiple buyers at one time. They are also familiar with a lot of title issues, which is because of the markets that we are in, I see a lot of not only different title issues, multiple title issues within one transaction. Having a title company that’s diverse in different types of closings and title issues is very helpful.

I agree because, as I do, particularly in Dallas-Fort Worth, where we are at you have seen about every title issue there is. Most of those regularly. That’s what makes what you do difficult but what has always been amazed me is you are at a point where you talk way above most of our heads in the sense of what you understand about the title because there is a lot that goes into understanding each of those title issues. Let’s talk about the actual staff at a title company. When I go in and I say, “This particular title company is investor-friendly,” but then I start to look at the particular staff that makes it up. What am I looking for when it comes to staff? What should I be expecting them to offer me?

Honestly, there are title companies that we work with that are on a smaller scale. There are 3 to 4, maybe 5 people in an office. In the title companies that we work with, there are 13 to 15 people within their office. What we are looking for, though, as far as staffing-wise or specifically, is not so much the number but the attitude and the people that we can contact for our deals.

Having a specific person to contact is a huge deal for me. Having somebody that I can go to on a day-to-day basis be like, “I have to get an update for Sunrise Drive.” Them being able to reply within 30 minutes or an hour is huge because I have so much on my plate. Having those updates daily or every other day helps me do my job that much better.

If that person is busy having someone else in their place to be like, “I don’t have that file in front of me but I can go grab it and look at it and tell you where they are at. I can give you an update myself.” It doesn’t mean that the more people, the better. It’s having somebody that is committed to our contracts and also having somebody else under them, assistant, whoever it is, be like, “She’s not available but let me help you with that update. Give me 30 minutes I will have it right to you.”

The word I hear is somebody that’s dedicated to your files at the title company is important so that you have one point of contact rather than calling in and speaking to different people on that team. At the same time, the team that’s behind your point of contact should also be able to step in as needed, and that’s what we should expect from our staff over at the title company.

What does it look like for a title company to go the extra mile? How do we gauge? I’m looking for specifics here. I’m working with the title company, and I want to go, “How do I know they are on par? How do I know, not even that they are on par but are going the extra mile?” What does that look like in your world with the title companies that you work with?

Again, it goes back to the communication and dedication that the title company has. I test start title companies before we use them all the way. For example, if I have 1 or 2 files that I give a title company, so go ahead and test them out. The updates that are something I’m looking for. If a title company has taken more than an hour or two to respond to me, that probably means that I’m not a top priority within their stack. A good title company, no matter how busy they are, is going to make time for you because they want your business. They care about your file. Take the time to be like, “I will get to this real quick. Let me update her fast on what’s going on.” It doesn’t take about five minutes.

WI 376 | Title Company

Title Company: What we’re looking for, staffing-wise, is not so much the number but the attitude and the people we can actually contact for our deals.

 

The communication, updating and, for example, one of the title companies that we have now. One of the head escrow agents, always. When I say going above and beyond, we had foreclosures, two of them going on simultaneously. 7 to 10-day close turnaround in a foreclosure that’s tough. We had to get a payoff to the attorney so the foreclosure wouldn’t take place. It was a Monday. Foreclosure is on Tuesday, the first Tuesday of the month. She went down to the attorney’s office herself to hand-deliver the payoff so they could stop the foreclosure.

That’s an example of going above and beyond right there. Taylor, you keep saying title companies, plural. My question is, do you put all of your eggs in 1 basket with 1 title company and try to strengthen that relationship and give them all your business? You go in and go, “If you do a great job for me, I’m going to give you all my business,” or do you go a different route and have more than one title company? What’s the better setup there in your experience?

Honestly, in my experience, you never want to put all your eggs in one basket. You always want to have multiple title companies, for sure. At the same time, the reason for that being the why you want multiple power companies, you never want them to lose that. You don’t want them to take you for granted. If your title company knows that you are sending them all your business, they are going, “We can basically slack off a little bit.” I’m a firm believer that having multiple title companies helps us out tremendously because I feel that it helps build a healthy type of competition between the title companies.

They know, “I got to fight for this a little bit.”

Yes. They don’t back off. That’s what I’m looking for and what we need because we have such a heavy contract count. I have so much on my plate at one time, even with Allen helping tremendously. She’s dealing with almost half the load as well. It’s still having those 2 to 3 title companies, and I don’t ever lie. I don’t ever say, “You are my only title company.” They know that there are multiple title companies. That helped us out tremendously because that lets them know that, “We appreciate you. You have our back. We love you,” but at the same time, I don’t want them to slack off and take the fact that I don’t want them to take our business for granted.

I can remember in the past when we, Taylor had one title company. They would get a little bit soft. They would lose that sense of urgency. You would come in and go, “We are going to start moving a partial amount of these files over to this next A and BC title company. All of a sudden, they would perk up. They started getting faster and should better, all of that stuff.

They realize they are losing business.

Keep them competing for your business. That’s important as well. Now, I’ve heard you also say that another great reason to have multiple title companies is based on the title issue, for instance, you might have one title company that does well with the X title issue. Another company that does well with this different title issue. Is that true that you are sending contracts to our different title companies based on the type of title issues because some are better at dealing with them?

Yes, it is very true. You do have title companies that specialize a little bit more. For example, when the attorneys are in-house. It’s easier to deal with, for example, the IRS, tax liens or foreclosures because you can ask your questions right then and there. When the attorney is out of office like the fee attorney, it’s a little bit harder with the communication because it’s going through the escrow officers. Having communication with the attorney helps a lot, and having title companies that specialize in certain, whether that be again the foreclosures or abstract judgments or certain liens. It helps speed the process along that much more and helps you with your closing time.

There are two types of investor-friendly title companies. Those that the attorney on staff works in the office they have and an in-office attorney, then there are other title companies that the attorney is out-of-office. That can determine based on where the attorney is located on how well they deal with certain title issues that would require the attorney to be more involved to get that title issue cleared. Did I get that, right?

When working with a title company, having that communication, being so hands-on, and being involved pays off.

Yes. We have some title companies their attorney is not in-office and is still fast. It’s only me. I feel more comfortable about my wording, my emails are going directly to them, my point is getting across, and I’m understanding what they are telling me. That helps a lot as well.

Putting all this together, if you haven’t read the book, I highly recommend called Traction. In Traction is what’s called EOS, which is the Entrepreneur’s Operating System. That’s only a fancy way of, “Here’s how you should build out your team and your company.” One of the parts of Traction is that every person in your number, in your company or team member is responsible for a number. The term is that everyone gets a number or gets a metric that they are responsible for. Your metric, Taylor, that you are responsible for in your position is a contract to close. Is that right?

Yes.

Can you define what it means to have that number? What are we talking about when we say your KPI or your metric is contract to close? What is that KPI for you?

We are looking specifically at how long it takes from when a contract comes in. I received a contract from our acquisition manager to when it’s closed out and funded, and we have our fee in the bank. Now, that number is between 23 and 24 days. That has been pretty consistent. We are trying to keep that consistent or lower. We are going to be trying to go lower than that.

From the time a contract comes in, meaning comes into your hands until we get closed and paid as an organization is around 23 to 24 days?

Yes.

Now, either you are reading, going, “I don’t know that number because I don’t track it or I track that number, and in no way is my number close to that.” Do you mind, Taylor, telling us about where we were? Where we started before you’ve got this all systemized? How long was it taking us years ago to close these transactions out?

On certain deals, it’s hard to believe, especially with like IRS liens and certain affidavit heirship issues, which were huge for us. Still, that’s a lot. Our clients have a lot of affidavit heirship, which is basically multiple people that have to be involved in the sale of the home that maybe they necessarily not know about privy too. As far as that number, when we first started, it could take up to 60 days to close those types of properties.

I can remember, Taylor, correct me if I’m wrong. Our average contract to close at one point was averaging over 50 as a whole, and then you cut it in half over time, you and the team. Isn’t that right?

WI 376 | Title Company

Title Company: Radio leads that know foreclosure’s coming and need help getting their homes sold are at least 50% to 70% more driven.

 

Yes.

If you are reading, that should give you a rabbit to chase. If you are looking at your contract to close process and again, the title company’s a part of that. I know there are other variables but it does give you a sense that if you have a well-oiled closing process, it should, on average, be about 23 to 24 days when you take all of your contracts each month, how long it took all of them to close and you average that number to come up with the true average.

Another question. What are a couple of things that you take responsibility for to send title company documentation to speed up that process? Again, I know there are several but what are the top two things that readers might go, “I need to know what can I help to do to speed up that process?” Do you mind touching on two documents that you make sure they have in their hands right when the contract is sent over to them?

Right when the contract is sent over, we require the seller’s authorization, which basically gives the authorization to the title company to request information on the seller’s behalf. Any liens with the city, any judgments, whatever the case may be, mortgage payoff with mortgage companies. Those types of things you are going to need 99.99% of the time. The lienholder is going to require that seller’s authorization. It’s usually a one-page form. The seller is signing off things. They give permission to the title company to request that on their behalf.

Do you get that signed or does the acquisition manager get that signed?

The acquisition manager gets that signed but we make sure if the acquisition manager does not have that, which sometimes it happens, it’s usually required. When they submit a contract, I have to have that piece of paper because it’s so important.

If you were to 80/20 this if you are going to get one document signed at the time of contract from the seller, get the seller’s authorization signed and sent over to the title company along with the contract. What’s the second one to that, would you say?

The second one to that would probably be the seller information. That basically is a one-page paper with their basic information, the last four of their social, their ID number, and their driver’s license number. That information is super important because we are dealing with a lot of information here. When the title company gets the commitment back and sees all these different names and people have common names like John Smith. I don’t know how many liens could probably pop up on that title but having that information right there is going to cancel out more than 50% of the nonsense that’s on the title commitments, so we don’t have to deal with that. We can focus on what’s needed to secure a title.

Do you take the mentality that the title company should do everything on their own? Do you see it more as a partnership between you, as the Director of Closing or Closing Manager, and the title company? I know some people are very hands-off. It’s like, “The title company should deal with all that. I only send it over and send me a check.” Where others would go, “There’s more of a partnership.” What philosophy do you take when it comes to working with the title company to get the best results?

There’s a partnership. I am very involved in the title process, probably more than I need to be but that also guarantees that we are closing things on time and that I have appropriate updates. One thing I’ve learned working here and for so long is things can change within an hour. Having that communication, being so hands-on, and being involved much in my world, pays off, and it pays off for us because it helps me keep a grasp on what’s needed.

For example, if the title company is like, “We can’t find this person.” I can’t tell you how many times our team is like, “We are having a brainstorming session, and we are going to figure out how to find this person, whether that be through Facebook or research. We are going to find this person.” We end up finding them, calling them, and as impossible as it seemed to secure that title from one day to the next, they are ready to go to the closing table because we have the information that’s needed.

Another great thing about radio leads is the quality. The profit margin is much higher.

Taylor, you know that we are helping people all around the country set up a radio to find discounted properties. You have been with us so long that you have processed contracts coming off of things like direct mail, ringless voicemail, online marketing, and bandit signs. You have process contracts coming from about every lead generation source out there because we have tried them all because we have been in business now for many years.

My question to you is, for those that are interested in setting up the radio. That’s something that they have heard us and myself talking about. Have you observed anything from your perspective as a Closing Manager when it comes to the difference between a contract that comes from radio versus other sources? I’m curious.

I have. There are three main things. One, they are usually easier to close. They do have their title issues but are a little bit easier to close. One reason for that is because the sellers are usually so driven. They are the ones calling us to help them.

You observed that the sellers coming off the radio are more motivated than the other sources we have?

Yes, I would argue that. They are driven. They are calling us, needing our help, so A versus B. The seller that we call maybe they are potentially going into foreclosure, and to the seller that’s called a radio lead that they know that foreclosure is coming and they need help getting their home sold. They are at least 50% to 75% more driven to, “What do you need? I can get it to you tomorrow. Do you need this information? I will call the IRS myself and sit on hold with them.” That’s why it’s so much easier when it comes to these leads. The quality of those leads is that much better because they are so driven. Another great thing about radio leads, again, has to do with the quality. The profit margin is much higher, usually on those radio leads.

Would you say that out of every type of marketing we do, our biggest profit comes from leads that come via radio?

I would say so, yes. A big part of it.

I know that as well because we track everything. What’s always interested me about radio, of all the benefits that are there is that one of the biggest which you hit on is the fact that it produces us the highest average profit per deal. If you have been reading and radio is something you are interested in, you are like, “I’m nervous about ringless voicemail and text blasting, the regulation, the tech changing. Direct mail is over-saturated in my area.”

Again, it keeps going on some of the challenges out there in finding discounted properties. That’s what wholesaling is. It’s the art and the ability to find properties at a discount. What I encourage you to do is go to WholesalingInc.com/reiradio and book a call. Ask more questions to figure out if 2020, for you, is about getting a great lead generation source set up like radio which, of course, for us has been the best thing we have ever set up throughout the years. Taylor, you have been around with us for a few years, so you know everything we have tried. The radio has been awesome. Taylor, thank you so much for coming on. Thank you for all the expertise that you have developed over the years. More importantly, your willingness to share that with us.

Thank you, Chris. Again, thanks for having me.

Thanks for tuning in. We appreciate you coming, and we will see you all soon.

 

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About Cody Hofhine

403Cody Hofhine, a multiple Inc 5000 Business Owner. Co Founder of Wholesaling Inc. the #1 Real Estate coaching program across the nation. Co Founder of Joe Homebuyer the leading Real Estate Franchise. A successful Real Estate investor/mentor and sought after Speaker.

Cody has coached over 3 thousand students on how to successfully Build their Real Estate Business through his real estate training as well as help individuals perform at their highest levels with his one-on-one mentoring.

Cody used his background in sales to quickly build multiple 7 and 8 figure Real Estate Businesses that all start on the foundation of clarity or Vision and Purpose.

Cody loves being with his family and doing crazy tricks behind a boat.

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