Posted on: March 23, 2022
WI 913 | Wholesale Closing Process

 

So you’ve already overcome the brass tracks in real estate wholesaling. Now you’re onto your final step (best part), and that is to close the deal. The closing process begins once the seller accepts, signs, and returns a purchase agreement. This can be enjoyable or time-consuming because closing deals don’t happen in a blink of an eye. But if you’re able to optimize the closing process correctly, not only will you save time, you can also close deals quicker.

Are you wondering how you can amp up and get your money faster? Our guest for today will teach you the nuts and bolts of how you can dominate the closing process and keep sellers (or buyers) on your side. We will pull Taylor in as she sits down and shares with us the basics of what a closing manager does to get that paycheck sooner. You’ll definitely absorb so much information from her, make sure to give this episode a listen and share this to others!

Streamlining Your Closing Process – How To Get Paid Faster On Every Wholesale Deal

Episode Transcription

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In this episode, we wanted to dive into how you can control potentially being paid sooner, how you get paid sooner, and how this is played into your closing process. If there is anything in your closing process, you need to have or you need to be proactive about something that you should be communicating to the seller and the title company. What should those things be that could slow your process down? What do you need to be doing to speed it up so you can get paid sooner?

I pulled on our closing manager, Taylor Martinez, who has been doing this for a couple of years now. She has got a pretty streamlined system and has been able to cut down her closing timeframe. Where some people could be about 60 or 90 days, she averages about 30 days or so in getting a property closed out. She wanted to walk us through, start with the very basics of what you should be looking at as a closing manager for a closing system, her actual process, and how to best be proactive to speed this process up for you.

I do believe that there is going to be some gems here in this conversation. Taylor is going to share purely on her experience alone in terms of the relationship building, the process piece, and what may come up, if there is anything that you can avoid dealing with, how to avoid it, how to speed this up, how to avoid any particular pitfalls, and then potentially, what do you do if someone gets to the closing table and then there is a holdup on trying to get this closed out. We want to pull Taylor on here to know her background. Taylor, do you mind doing us an introduction if you can? It can be a simple baseline explaining your role or at least a description of your role and what that entails as a closing manager.

When you get information, understand it and use it to know the market you’re working on.

Thank you for having me. My name is Taylor Martinez. I have been the Closing Manager for Cosa Investments for several years. My main role and goal as the closing manager is taking the contract from beginning to end, sending it over to the title company, and then working closely with the title company to cure the title. I’m making sure that the title is clean, if there are any issues with probate, taxes, or even finding people that were able to get all that squared away. That way, we can close the property and get us paid.

That is our favorite part, getting paid. What we are all aiming to do is to get paid here. I want to make sure that we are covering all bases. There are two different types of people that usually tune in. Either you are super new or you have probably already gotten into the swing of things of some sort of system. Your role is remote. You have been working remotely potentially or remotely on and off. How does that play into your actual role?

I have been working remotely probably half the time that I have been with Cosa Investments, but I am based here in the DFW area, so that helps to know the areas and the locations, especially with the properties that we are dealing with, and then also choosing our title company. They are locals so we speak the same lingo as far as issues, calling downtown if we need anything from there, and getting that information and understanding it. Knowing the market that we are working in plays a big part in that.

I’m so glad you mentioned that. I do not know if you have a specific system. I would imagine that within seven years, you have probably gotten a couple of things pinned down of what to do and what not to do. If there is someone who is trying to close their first actual deal and we are using a lead, as an example, lead calls in, we kick it to the prospect, they kick it to the acquisition manager who executes an actual contract, and then the contract comes your way. What are the actual steps then to get that lead closed? What does that process entail? What does the title make you responsible for, and then what are you mostly responsible for on your side?

We do things a little bit differently here because we want to ensure that our properties are closed in a reasonable amount of time. What I mean by that is we are getting problem properties that would normally take maybe 60, 90, or even more days to close. We wanted to try and work that down to 30 and under, and we have been successful with that. Once I get a property and I send it over to the title company of my choice, what we do is we have an opening checklist. I try to have a conversation with the seller to see what kind of issues we are going to have so I can avoid having to wait for the title to give me that later on.

You are jumping in there and going, “I could have a one-on-one conversation with this seller to see what is going to be coming up potentially. If there is anything for you to anticipate that could come up instead of waiting for the title to bring it up, you just go, “Let me go ahead and step in and have a conversation with the seller.”

WI 913 | Wholesale Closing Process

Wholesale Closing Process: We have an opening checklist and we try to have a conversation with the seller to see what kind of issues we may have.

 

I want to know because if there is a probate issue, I’m not going to send it to title company B. I want to send it to title company A because I know that they have an attorney in-house and they will be able to work with the probate that much closer and get that title cleared faster. That is why I want to have that conversation on the front end. That way, I can get a jump start on even what title company I want to send it to. That is also something different that we do. I sit down with the title company and I try to game plan what I can do on my end and what they are doing. That way, we are working simultaneously to clear that title so we can close that much faster.

You guys sit down and game plan the actual property. I am curious. You mentioned that depending on what the situation is, you check to see if there is an attorney. You mentioned the attorney being in-house. How does that affect what is going on? If there is an attorney in-house at this particular title company, is that better to work with? Should you be aiming to find a title company that does have its own attorney in-house?

Not necessarily because I work with both. I work with some title companies that the attorney is in-house and then I work with some title companies that they are not. It is just the escrow officers that I’m dealing with. The reason that I do an attorney in-house is because when I’m in a hurry and trying to find an answer and I need it right then and there, it is very easy for me to call them up and say, “Can we look at this overall? What does it mean? What is the timeframe?” I’m getting my answer more straightforward versus having to wait for someone else to give me that information.

With the type of sellers you end up coming into contact with on the wholesaling side, they do not have pretty situations. They are not cookie-cutter scenarios. Having the ability to reach out to the seller and at least get an opportunity to go over some of their issues prior to you learning about it through the title, what does that look like? Are the sellers usually open with you in discussing that or is it more like pulling teeth there? Have you found a rhythm that works best to get the information that you are looking for from the actual seller or are those multiple conversations?

There are many layers to that, but to answer your question, we have some sellers that are aware of their situation, are very open, and want to get this done. They want to sell the home and give me all the information they can so they can get paid faster. We got some sellers on the other hand that thought maybe that they were the only heir to the property and that is not the case. There are cousins involved.

We are having to track people down, then we have some people that are wanting to sell the house but legally, it is not theirs to sell. Sometimes we find that out on the back end. It is a little bit time-wasting. That is why we want to have those questions on the front end to weed that kind of situation out. That way, we are not wasting anybody’s time, especially our own, because time is money. We do not want to spend too much time on anything that is not going to be profitable.

Don’t waste anybody’s time, especially your own, because time is money.

That makes sense. I do recall quite a few people calling in and acting as if the property were their own. If there is anything that should be in your system, it is trying to vet them as much as you possibly can on the front end before you end up at a particular point where you are almost going, “I wasted my time working with the seller that does not have any legal rights to the property.” I understand that.

Is there anything else to your process over the course of seven years? You mentioned where most people are about 60 to 90 days as their closing time, you have been able to get it down to 30 days. Can you walk us all through the learning process of what exactly that took to get that work down to 30 days and how you maintain that?

It is lots of checklists. I have lots of checklists on hand. Depending on the situation itself, some properties are going to be harder to close because the issues on them are more difficult to deal with. I’m not saying that every property is 30 days or less, but the majority of them are. Even the affidavit of heirship takes a while. I have found that we can help the title company and get those affidavits of heirship filled out on the front end. That way, the title company already has them in hand. We are not waiting or wasting our time with anything else. It all falls into place and we are saving time on the back end while they are trying to make the other.

When I first started, I did not understand what that took. The title company is calling the seller, asking them all these questions. Sometimes, the seller would be, “Can I fill this out later?” They will then send it back to you. A week would go by, the title company follows up and still does not hear from them. Another week goes by, the title company follows up and still has not heard from them. By the time we know, it has already been a month and a half and they have not even got the paperwork back. That is the kind of thing that we tried to avoid.

I will call the seller and be like, “Can I bring this to you? Can we sit down and fill this out? After signing your contract, I’m going to send you that paperwork.” If we can get it done in the front end, that way, the title company will have it. That is what we prefer to do because they are already in that mode of filling out paperwork and getting things done. It works out better that they have it right then and there and they are filling that information out, and getting it to us that much faster.

Is that common? Do you run into heirship issues? If I’m new to wholesaling and I’m a new investor and I’m trying to make a list of what to be on the lookout for in terms of situations that usually come in. We’re dealing with people that have sticky situations and not so pretty scenarios. It’s like, “No problem.” You just embrace that piece, but if they are building their system for the first time and just trying to prep or you have mentioned situations regarding probate, how common are heirship issues? How common are probates? Are they the least common things that you come across when trying to close a property?

WI 913 | Wholesale Closing Process

Wholesale Closing Process: In Texas, there are six squatter rights, so we have to be careful.

 

They are more common to us. Heirship was probably about half of the business. That is because of where we are marketing and how we are marketing our clientele, which we love. These title issues were pretty common because we knew the clientele we were marketing to, so it was not a huge surprise. That is why we tried to make the process that much easier and tried to build it out on the front end. We knew that it was only a matter of time before something came up and we would need it, so why not get it out of the way on the front end?

That makes perfect sense. Is there anything else that usually comes up? For someone that is new, you can probably run into an issue where probate may come up. There are also heirship issues. What else could they potentially run into?

Another problem or issue they can run into with the heirship is not knowing where the individual on the title was. For example, a grandmother owned the property and it was passed down to her children. Nobody had a will then, and then it was passed down to the grandchildren once all the children passed away. There could be eighteen people on the title, but there are issues within the family and they did not know where the three people were.

That type of problem does not happen super often, but it does happen. That is a big one, trying to hunt people down and trying to find individuals. Even people in jail or prison, the title is trying to write letters and get that person on board or explain to them that the house is being sold for this amount and they can sign the paperwork there. There is a ton of work, but it’s worth it in the end, especially if we could get it for a good price.

What is the craziest situation that has landed on your lap on the closing side that you still were able to successfully close out? What is the craziest thing that has come up for you?

This has happened a couple of times where the family did not even want to talk to each other, but they knew they all had to sell. It was three sisters. One of them had passed away, so her children were heirs to the property. The two sisters that were left did not want anything to do with the niece and nephews that were involved. I ended up finding their information. I called them myself. They were not happy about them selling, but they agreed. It is nothing that I personally can get into in any more detail. Overall, I played the mediator between the two of them. They never even talked to each other during the transaction. I did all the talking and sending messages back and forth, but we still got it closed at the end of the day.

Make sure everyone’s happy and on the same page during transactions.

That is insane that you would be in a situation where they do not even want to be bothered conversating with one another. You said that has happened a couple of times.

That has happened a couple of times, but that one stuck with me more because of the hostility between them. They were drug addicts. They did not want anything to do with them. That one stuck with me a little bit more because of how much time and effort I had to put into that one.

That is a lot there. What happens if there is a squatter in the property? What happens if that lands in your lap?

That has not happened too many times but even in Texas, there are squatter rights, so we have to be careful. We can’t personally do anything about it. We have to go to the owner and they have to take care of it, whether it is going through eviction, going with a constable or however they can take care of it. We have been willing even a few times to be like, “Maybe we should offer them cash to get out,” but I do not think it has ever had to come to that. There have been issues with squatters, but nothing has made us not be able to close.

That leads me to my next question. When do you know when you need to incentivize the seller to keep the process moving? When do you throw up your hands and go, “This is not working. There is nothing here for us to do.”

The title company will talk to the seller as well and they are pretty aware of where and how the process is going. I try to keep in contact with the sellers pretty often and update them at least twice a week so that momentum never drops off. They need to be reminded that we are working to get them paid, and the faster they cooperate and get us what we need, the faster that they will have money in their pocket.

WI 913 | Wholesale Closing Process

Wholesale Closing Process: We ask clients if we have permission to call the attorney to get updates for them.

 

It is making sure that I communicate with them, give them updates, get them with a title company if they have questions that I can’t answer, and making sure the title company reaches out to them in a timely manner and updates them when they need the updates. That keeps that momentum going so they are not like, “I do not want to bother with this. I’m changing my mind. I want to keep the house.” It keeps them wanting it as much as we do to get it closed.

You did mention affidavit heirship and also probate. Some people are completely new to this. Is there a basic definition for the two? What do you look for? Is there a set of questions that you are utilizing to vet the sellers? Is there something else that you give them or provide them with direction to get their actual property closed?

Probate is the actual formal and proper legal process of when an individual has a will. They want to take it through that process, especially if there are other people involved. The actual legal process takes between 6 to 9 months. Most people we deal with, if they are going to go through probate, they already knew you can’t sell their home during that time because nothing is set in stone. Most people that are going to have to go through probate are already in that process when they come to us or when we are helping them sell their homes. As far as pointing them in the right direction, we do not have to point them in any direction. They pretty much know what they have to do or wait for that attorney to get back to them with updates.

The only different thing that we do is we ask them if we have permission to call the attorney to get updates for them. It won’t necessarily push the process any faster, but at least we know where we are in the process. That way, we can give them updates and let them know, especially if we already have a buyer. On the other end, the affidavit of heirship is when someone does not have a will and it is just paperwork. It is a questionnaire that is 3 or 4 pages, and the title company provides that. One of my questions is, did they have a will? If it is a no, then you know that they probably will need an affidavit of heirship. It is like who owned the home, and it is all their children. If one is deceased, it is their children’s children.

Usually, with the affidavit of heirship, they will need birth certificates and death certificates. They are going to have to turn that into the title company, and then the attorney draws up the affidavit and they sign at closing. It is saying that there was no will, but these are the heirs that are involved and they have the right to sell the home.

We have covered a lot in terms of the very basics of understanding what this role entails. You roughly hit going through the type of situations that you end up running into, the types of items that can potentially come up, and we touched on the title company. This has come up a lot throughout your process. I am curious about your engagement with the actual seller and that vetting process. If you would agree, one of the major things to get clarified is the vetting process on who is who and what is what regarding the property, so that you know if you can get it closed out or what is going to affect the actual closing, right?

If you want a process done much faster, you’ll have to be involved.

Yeah. That is a big deal.

For those that are reading, and you said, “Here are the five most important questions that they need to make sure they vet upfront, what would that be? Is that the ownership clarifying if there are heirs involved? If they could jot this down and take notes on it if they are trying to speed up or watch their closing timeframe, they want to get paid quicker, and if there is anything potentially that the seller could be dealing with that may be hurting their closing timeframe, if there is anything you can be as the investor, the actual closing manager or whoever that may be that is responsible for closing this out, and they want to be as proactive as possible, these are the most important questions that you need to make sure you get vetted as soon as possible. What would those be?

One of the posts would be comparing tax records to whoever signed the contract. I can’t tell you how many times I would get sellers that are like, “I’m ready to sell,” and then you look at the taxes and there are different people. I’m like, “Who is that?” They are like, “That is my grandmother.” I was like, “Did she have a will?” They are like, “No, but my father was one of her kids.” I was like, “Does she have any more kids?” They are like, “Yeah. I have aunts and uncles.” I was like, “Are they involved?” They are like, “No. They are deceased.” I was like, “What about their children?” They are like, “We do not talk to them.” I was like, “It does not work that way. We have to have everybody involved here.” Those are the types of opening questions and what I mean by getting to the bottom line of whose home it is and then going from there.

Comparing tax to who is signing the contract is important, and then asking about wills. If they are going through probate, that is great, and if we can get updates weekly, that is even better, but if you know that there was not a will and you are going to need an affidavit of heirship, knocking that out in the front end is super important. You are going to save so much time. I can’t stress that enough. Even for a month, 4, 5, or 6 deals, just try to get that paperwork done in the front end. It will speed up the process that much faster because it does take these title companies time and energy to call these individuals, especially if there is more than one that has to be filled out. Getting that completed and turned over to them, they’ll appreciate it because they do not have to go and dig for this information. They have it right there.

It is making sure the right person is signing the contract. If the will and the affidavit of heirship are needed, it is getting that over and then making sure that everyone is on the same agreement as far as move-outs. We try to avoid leasebacks so that way, we do not have any tenant issues on the backend with our buyers. I do not mean that it was always an issue, but if some people want leasebacks for too long, that affects the buyers getting in and starting their work. It also can get messy. It’s just trying to make sure that everyone is happy, everyone is on the same page and getting that thing and those questions out of the way in the front end helps the process speed faster.

You want to be proactive as possible. If you want to get paid and you want to get paid sooner, you want to make sure you are being proactive as much as you possibly can in what you can be involved in and communicating with the actual seller. You have listed out the best ways to be proactive on the seller’s side. If I’m working with the seller, what is my role or how proactive can I be with the title? Is there anything that I need to make sure it’s handed over to them in a certain timeframe? Should I be talking to the title every single day? If I’m the investor, the wholesaler or the closing manager and I’m working with title, what should be in place on my end as well?

WI 913 | Wholesale Closing Process

Wholesale Closing Process: Get to the bottom line of whose home it is and then go from there.

 

On our end, we are a little bit different from others in that I’m much more involved than the everyday closing manager. I’m working hand-in-hand with the title company. My foot is in that process the whole way from beginning to end and I’m communicating and getting that information from the seller to title or from title to the seller that much faster because I want the transaction to close that much sooner.

There are two documents that the title company usually requests in the beginning. It is an information request that has the seller’s name, date of birth and social, and then there is another document that the title company uses with similar information but it is required. If they do not have those two documents to even start off with, it delays things more than it should.

I’m talking to the seller and getting to know if they are in probate. If there is a will and they are in probate, that is great. If there is a will and they have not even started probate, I get the title company to call them and point them in the right direction of where they even need to begin. Also, if there is not a will at all and then an affidavit of heirship is needed, having that documentation ready with those two other pages that the title company will need, and getting them to fill all that information out and sending it to the title company at least 24 to 48 hours after I have already sent them the contract.

Do you provide the sellers with a timeframe so that they are able to get all the information that you need back over to the title? Do you end up communicating some sort of timeframe for them to watch your overall timeframe?

Those 24 to 48 hours are crucial because they went through that and they have signed the contract. They are in this mode of like, “I’m getting things done. The contract is signed. What else do I need to do right now?” We have found it very effective that once that contract is signed right then and there, or even if we can send it with the contract when the contract is signed that way, they open it up in another email like, “These are the additional documents that need to turn in. We need to get these back within 24 hours.” That way, we can make sure that the title process is moving along as quickly as possible.”

That makes a whole lot more sense on that side. I’m sure the title appreciates it.

They like not having to hunt people down and make those phone calls over and over because once they have signed the contract, these individuals get it in their head like, “That is all I need to do,” which can happen all the time. I remember when I first started, I did not have the streamlined process down. I reach out to the title like, “What is the update?” I then had this realization that if I want this done within a certain amount of time and I want these closed within a certain amount of time, I’m going to have to be the one to do it. It is not to say that our title companies aren’t working their butt off because they are and they are getting things done. It is just I want it done that much faster, so I need to be in there doing it with them.

Those are great stuff. Thank you so much for sharing that. You have done such an amazing job as a closing manager for us. On the marketing side, I would have no way of truly knowing that radio was as profitable as it is if you were not able to get those closed out. You have some amazing and beautiful pops there when it comes to some of the deals that we have been able to get.

Thank you so much. It takes both sides. You can have the greatest marketing channel in the world, but you want to be careful with your closing process because that is where you can get yourself burned. It is getting that pushed through closing so that you can start dispositioning it and speeding up that process to get paid. If there is something that can increase your getting paid or if you have been trying to figure that out and looking at your system, this may be the actual episode you are missing on.

You are like, “How do I get paid sooner? What kind of pitfalls should I be on the lookout for? What should I be doing? How proactive should I be? What does that look like for a seller? What does that look as I’m working with different title companies or my actual title company?” Taylor, thank you so much again. It has been awesome to have you on and have all of that shared.

Also, for people that are out there, thank you as always. If you are looking into the REI Radio 2.0 program and you have any additional questions we can help you sort through, feel free to go over to the website. That is WholesalingInc/REIRadio if you do have a couple of questions or if you are trying to piece together if this is something that is for your business. Thank you as always. I’m super excited for whatever gems that came out of this that is going to be useful for you. We will catch you on the next episode. Thank you.

 

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About Grace Mills

WI 913 | Wholesale Closing ProcessGrace Mills is the coach of REI Radio. She has worked side by side with Chris Arnold during the initial program roll out, coaching & fulfilling student needs. For almost 8 years she’s managed and directed all marketing channels and split tested every element of Radio to help investors set up Radio in any market they choose. She has worked with investors & agents all over the United States and has helped many investors make thousands of dollars using Radio.

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