Title Transactions for House FlippersMarch, 30 2018
Title insurance is a necessary part of purchasing a home. For those in the property rehabbing business, title insurance can see like a wasted investment over multiple transactions without a claim ever arising. But it should never be something you go without.
Here are some things to consider if you’re considering skipping title insurance on your next rehab project.
Title Searches Aren’t Perfect
When you obtain your funding for your rehab property, the bank will probably do a preliminary title search. It’s one way of gaining a quick understanding if your investment is worth their risk. That said, this title search is not perfect, so just because you’ve obtained funding does not mean the title is clear. Title searches aren’t perfect; in fact here’s a list of problems a title search could miss.
Rehab Properties Aren’t Perfect Either
You’re not purchasing rehab properties because they are a finished product. Most of the time, the property has its issues. These issues can also exist on paper as well; especially with rehab properties. So as a house flipper, it’s important you mitigate as much of the extra risk you experience as possible. One major way to mitigate this risk is to look into title insurance.
Is the Risk Worth the Reward?
We’ve been asked, “do I really need title insurance if I’m only going to own the home for a few months?”. Yes, the answer is yes. You always want title insurance.
Technically, you don’t need title insurance. You also don’t need a backup parachute when skydiving—but what happens if your main chute fails? The risk of not obtaining title insurance is far worse than the cost savings it can bring to avoid it. Don’t try and cut costs here, do it in other areas of your rehab budget.
Title Insurance for Rehab Flippers
Did you know? Many title companies offer unique types of title insurance programs for rehabbers and house flippers. They understand that paying for title insurance twice when your goal is to buy the property and then quickly sell it again makes no sense. This is why some title insurance providers offer the ability to transfer the title insurance without paying a second time for the second search.
For more information on title insurance for rehabbers and house flippers, get in touch with your local title company, today. Armour title services is a nationwide title company offering the fastest closing at the lowest rates. We can help with you with all of your title and closing services. Give us a call today at 1-877-TITLE-30 today!
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