Our In-House Title Escrow Company is COMING SOON (028)
Our In-House Title Escrow Company is COMING SOON (028)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the House Academy show. Entertaining real estate investment talk. I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWit, broadcasting from sunny southern California.
Steven Butala: Today Jill and I talk about our in house title escrow company and how it’s coming soon.
Jill DeWit: Oh yep.
Steven Butala: Actually it’s been around for a while.
Jill DeWit: Yep.
Steven Butala: It was so popular we had to turn it off.
Jill DeWit: Yep.
Steven Butala: Jill’s going to explain it all.
Jill DeWit: Yep.
Steven Butala: We’re bringing it back. House Academy is not that old. We’re bringing it back. It’s the single most requested tool that we have. Where is Title Mind? Where is it, what happened?
Jill DeWit: Title Mind is what it is. It’s coming.
Steven Butala: Before we get into it, let’s take a question posted by one of our members on the HouseAcademy.com online community, it’s free.
Jill DeWit: Stacy asks, what are acceptable closing costs for a $250000 house?
Steven Butala: What do you think Jill?
Jill DeWit: $2000
Steven Butala: Wow, just boom.
Jill DeWit: Yeah.
Steven Butala: The answer is, it really depends on the market you’re in. There’s some markets where it’s very inexpensive to close on a house. Texas is one of them. There’s some markets, as you would imagine, like California where it’s a lot more. Some of those costs are not real costs, they’re actual prorations for taxes. Taxes are real high in Texas.
Jill DeWit: That’s not including that. I’m just talking closing costs. That’s all I’m talking.
Steven Butala: So what you need to know in this venue is there’s HUD-1 and I heavily encourage you to look up HUD-1, just look at, there’s a million HUD-1 on Google. Just look at the price of the house, what the seller proceeds went to on the buyer and seller. It’s debit and credit thing, like an accounting thing. It’s not complicated at all. You’ve got to look for line 1400. Is it 1100 or 1400? I think it’s 1400. And that’s where escrow companies love to jam cost-centing, $45 for FEDEX.
Jill DeWit: I’m including all that in there.
Steven Butala: I know.
Jill DeWit: So that’s like, for our deals that we’ve done, we’ve done several in that price range, and that’s the sweet spot.
Steven Butala: That’s what to plan for. It could be less, could be a little bit more.
Jill DeWit: Sometimes I can get a little bit less. I’m lucky and get it down to 1400 or 1200, but just to give you a gauge, if you’re spending 2000 it’s not crazy. That’s everything in there. They’ll pad their notary fees, they’ll pad their mail fees. You just have to be, they do. It’s ridiculous.
Steven Butala: Got to watch them.
Jill DeWit: Then sometimes it’s just the way it is. They don’t back down. That’s partially why Title Mind is coming back. We can explain more about that here.
Steven Butala: Today’s topic, our in-house title escrow company is coming soon. This is why you’re listening.
Jill DeWit: This is one of the reasons why we’re doing this.
Steven Butala: Yeah.
Jill DeWit: I’m tired of it. I’m tired.
Steven Butala: That’s my girl. Mad as hell and I’m not going to take it anymore.
Jill DeWit: Gosh. If you’ve not been through this, you’re lucky and it’s coming. But I tell you, these escrow companies, they charge $150 no matter what. They’re sending something with a $0.49 stamp or a $6 postage, we’re like, you know what, sorry. Every deal we put in $150 for all the mail to go back and forth for signing, things like that. I’m like, you’ve got to be kidding. It costs all of $40, and they’re sorry that’s just the way it is. They also do this with notaries. This one’s a good one too. We all know the notary costs $50 or $75, but no, it’s $150. Like, okay fine. There’s nothing you can do about it. Or what you can do though is what we’re doing. Open your own title company.
Jill DeWit: What it is, is Title Mind. We opened it a while back as escrow only, even thought Title is in the title, it’s a little confusing. So phase one is going to be what it was back then, which is escrow only. There’s a lot of us doing transactions that are small enough, easy enough, no one’s going to build on it. There’s several reasons they need to do it quick and easy and fast. They only need escrow at this point. If you’ve ever tried to find a company that will only do escrow for you, which is basically being an unrelated third party, close the deal for you, prepare the deed, get recorded, handle the passing of the money, it’s very hard to find that. I know, I can’t think of one right now off the top of my head even that will do it.
Steven Butala: I can’t either. I don’t know of anyone.
Jill DeWit: They can’t process that. So many of the deals that we’re doing, I might be closing myself. So what we’ve been doing here, it’s started with the land business where we were self closing deals and that’s where we brought up Title Mind. So now what we’re going to do, what happened was, it got over, we got overwhelmed. The day we opened the door and basically took the curtain down on the website, we were flooded with transactions. So much so, we couldn’t complete our own deals, let alone keep up with everything, with the volume.
Steven Butala: That was our thought. We’re doing our own deals anyway. We’ve got a staff of people that are closing our deals, hey why not, let’s just put up a website with a little form on it and we can do your deals too. It was a beautiful theory and we’re certainly capable of doing that, but we got 35 orders or something.
Jill DeWit: It was hilarious. Couldn’t keep up. There’s a little bit of work. What the process is, this is really more for land and I’ll tell you how it’s going to relate to houses in a minute, but for a land buyer, say you’re buying a property for $4000 and you’re going to sell it for 12 or 10, something like that. It’s straightforward, the guy has owned it forever, never built on it. There’s situations like that, I don’t really need title, it’s only for hunting or camping, the guy is not going to do anything with it like that. So instead of self-closing it, which is a person doing their own deed, like me going out writing my own deed, arranging my own notary, lining up the signing, over nighting it to the guy, my seller. Him signing it, my notary handing him the payment, which I put in an envelope for him with instructions. Then it’s coming back to me, now I’m getting it together and sending it in to be recorded and then come back to me, now I’m ready to sell it kind of thing.
Jill DeWit: We took that over and we’re doing it for everyone and that’s why everybody loved it. They’re like wow, I can just call Title Mind and I just negotiate the deal, I call Title Mind, they process the rest. Awesome.
Steven Butala: Think of it like this. You send a mailer out, you get 10 deals back that you want to do. You’ve got the money for it and you’re convinced that everything is pretty good on the deal and you just want to keep being a deal maker. That’s what you want. You want to be a deal maker, you don’t want to be a paper pusher.
Jill DeWit: Now you’re bogged down with doing a deed and a notary and everything.
Steven Butala: Just shove it all to us.
Jill DeWit: That’s what it is.
Steven Butala: Shove it all to our staff and they process it and we get paid out of escrow. I don’t know exactly how it’s going to go. We take a little bit of money up front to make sure everybody is serious and then all the actual costs get paid out of escrow on the acquisition.
Jill DeWit: Well still do the escrow thing too. Here’s what’s going to happen. That’s perfect. The point you just made, which I love is you don’t want to get bogged down with these, which is true. The deal is done, you should be moving on your next acquisition and posting this one for sale and making sure that happens. The paper part in the middle is where a lot of us are, it takes some work and we don’t need to do it. Somebody else can do it. What’s going to happen now, I’m going to tell you, we’re going to bring back Title Mind, it’s probably several weeks away, just so you know, we’re working on the escrow part as well. We’re going to bring it back. Phase one will be a version of what we did before, which is escrow only where we’re basically the transaction coordinator doing the deeds, getting it recorded, sending the mail, arranging the notary, everything to take it off your plate. Then phase two will be a traditional in house title company.
Steven Butala: Exactly like First American Title.
Jill DeWit: Right.
Steven Butala: Same situation.
Jill DeWit: Where you can call us with land or houses.
Steven Butala: It’s better service, probably a little bit cheaper.
Jill DeWit: It could be, yeah. And you know what my note was? Here’s the thing I think we should think about, we haven’t even reopened the site yet or really got back into it yet, but I was thinking, what’s different about us is its by investors for investors. Nobody but us really knows what we need. You as an investor, you don’t need the fluff. You don’t need to be padded. I’m not going to pad these fees. I’m so mad about it, you can probably tell. I am adamant about passing through directly what the costs are. We’ll get paid for our time and doing the transaction in the middle, but there’s not going to be any fluff. I’m going to make sure of that.
Steven Butala: For you out there, you experienced investors, you know how frustrating it is to wait on title. It happens all the time. You know how refreshing it is to get, let’s say, a closing attorney or a really good title agent that’s Johnny-on-the-Spot about it. Investors specifically know what they’re doing. For us, honestly they’re the easiest people to deal with because they understand our language. It’s the retail people and the home owners themselves and the home sellers that are going to do this once or twice or three times in their whole life that are the problem. We remove all that. You don’t want to deal with that. Let us deal with it. We’ve been doing 16000 deals ago we learned, here we are.
Jill DeWit: Exactly. I’m excited.
Steven Butala: I am too. I really am actually. It was, of all the products we’ve released like Parcel Fact and Counting Wise and all of them.
Jill DeWit: O2O
Steven Butala: Offers to Owners. This one has got the best response and just buried us.
Jill DeWit: I know people are, [inaudible 00:09:52] here’s my only thing, the minute we said it, like this show, the day this show airs, I know you guys are going to be holding back, saving that one, saving that one for Title Mind. Saving that one for Title Mind.
Steven Butala: Please don’t do that.
Jill DeWit: Get them closed because we’re a few weeks/months away, but we want you to know it’s in the works. We’re bringing it back. We all need it.
Steven Butala: We know your time is valuable. Thanks for spending some of it with us today. Join us next time for the episode called Winning Over a Seller.
Jill DeWit: And we answer your questions posted on our online community found at HouseAcademy.com. It is free.
Steven Butala: You are not alone in your real estate ambition. I’m real excited about Title Mind. This industry, here’s the truth.
Jill DeWit: Yeah.
Steven Butala: This industry is just run over with publicly traded companies that some actuary sits in an office somewhere and says, hey we should charge $25 more for all, across the board, for notary services and it should be mandatory that we have to send one out. You know how this goes.
Jill DeWit: Totally.
Steven Butala: We’re going to make $16 million more tomorrow.
Jill DeWit: Yep, just by doing that.
Steven Butala: I’m excited.
Jill DeWit: I am too. I can’t take it. Wherever you’re watching, wherever you’re listening, please subscribe and rate us there. We are Steve and Jill.
Steven Butala: Information.
Jill DeWit: Inspiration.
Steven Butala: To buy undervalued property.
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