Secret Sauce of our Most Successful Members
Jack Butala: Secret Sauce of our Most Successful Members. Leave us your feedback for this podcast on iTunes and get the free ebook at landacademy.com, you don't even have to read it. Thanks for listening.
Jack: Jack Butala with Jill DeWit.
Jill: Hi.
Jack: Welcome to our show. Today in this episode Jill and I talk about the secret sauce of our most successful members. A little bit like with Luke's myth last week Jill. Before we get into it let's take a question posted by one of our members on the landacademy.com online community. It's free.
Jill: Dave asked, "how difficult is it to do a terms deal if the buyer wants title insurance? Would you structure the terms the same way but have the buyer pay for title insurance up front?"
Jack: Can I answer this?
Jill: Sure. Go right ahead.
Jack: There's exactly two ways. Well, there's a lot of ways to do terms deals but there's two basic big picture ways. One, through a title agent just like he's describing. One is just where you do the contracts yourself and everybody agrees to pay. The first way is called a deed of trust in certain places. In Arizona that's what it's called. You actually record the deed before ... the big difference between the two is this, when you go through a title agent you record the document and then the lean gets removed just like a mortgage. The lean on a document or like financing a car there's now a lean. So you own the property but you have to pay it off so that's exactly what you're describing and what you're asking is it possible to do this? Yes, you record it just like a mortgage for a house. The buyer owns the property, they pay and pay and pay, and when it's done the lean gets removed. It's the buyers name from day one and at the end it's still in the buyer's name. There's no lean. The other way stays in the seller name all the way through the term. The buyer pays and at the end it gets recorded. How's that for simple?
Jill: I know. What would you do in the second one about the title insurance though? Would you have them pay up front?
Jack: If it's a typical deal for us where you're making an avid profit on the down payment. I would think I'd pay.
Jill: I might roll in. I'm with you because let's just say.
Jack: [inaudible 02:14]
Jill: Knowing Dave let's say it's one of these deals. He bought it for four he's selling it for five or four thousand, he's selling it for 20 thousand because it's on terms. Maybe it's a five hundred or so a thousand dollar down payment. Let's just say. Let's say that he's getting 200 dollars a month for a long long long time. I'm just kind of using some numbers.
Jack: That's a typical deal for a ... Jill and I both know exactly which Dave this is.
Jill: I'm thinking that I might plop down the 700 dollars once I get some payment from the guy. Even two payments in or something I'd say ... whatever you work it out. I'll get you the title insurance because I'm going to roll that cost in basically. He had the title insurance. Because if anything crazy happens and the seller after six months is gone, the money you've got up front pay for that title insurance and that's going to help you sell it the next time.
Jack: This is probably a topic for a whole episode but the down side through dding it through a title agent like this is that if the buyer stops paying it's going to cost between ... and if you have to go through a foreclosure process just like on a house. It's costs between one and two thousand dollars to get it back in your name as an owner. You only ever want to do that when you really are convinc...