As a real estate investor, the title insurance company you choose can make a big difference in the quality of your transactions. Be sure you have open lines of communication with your Title Officer so that you are able to get questions answered up front on any concerns you might have on your title report. Here are a few tips to help you familiarize yourself with the title report and some common items to scrutinize.
If you don’t have a relationship with a title company, you are more than welcome to call me and I’ll be happy to help you sort things out!

Review Your Title Report For ‘Schedule A’  Concerns 

Policy Type: Ensure the Owner’s policy on Schedule A is the proper form of policy per the Purchase and Sale.

Agreement: Example of policy types are Owner’s Standard, Homeowner’s or Owner’s Extended.

Ownership: Ensure the vesting name matches your seller. If the seller is deceased, yet the title company does not vest in the estate of the deceased, look for a pending probate action as an exception to title. If there is not a probate, contact your title company to find out their requirements.

Legal Description: Ensure the legal description matches the map provided with the title report or with your Purchase and Sale Agreement.

Review Your Title Report For ‘Schedule B’ Concerns

Easements, agreements and restrictions should be reviewed by the Realtor, seller and buyer. Is there something listed your buyer can’t live with? Does the property meet the needs for your buyer for the intended use?  Ensure monetary exceptions appear to be correct. Are there valid outstanding Deeds of Trusts, judgments or liens?

Are their questionable judgments or liens that have identity concerns? Does the paragraph contain the words “question of identity”? If so, a Statement of Identity (or Identification Affidavit) will be provided and required to be submitted to the title company. Individuals with common names like Baker and Smith will often have questionable judgments attached to their name.

Is there a recorded survey as a note or exception to title? An encroachment concern may be recorded on the survey. A title company may require a survey be done depending on the type of coverage.

Is there an inspection paragraph to be cleared? A title company may require an inspection based on information found in an Exception.

Exceptions are cause for concern.  Exceptions are exclusions of coverage.

Notes are for information only. There is no question on title.

About the author…
Since 1983 Elizabeth Peterson has provided her clients with a level of professionalism and expertise that sets her apart in the title industry. Her years of experience and commitment to client advocacy means Real Estate Agents, Lenders and Investors receive the support necessary to successfully close more transactions for buyers and sellers and refinance loans.  If you are looking for a title and escrow partner you can count on, Elizabeth is here to help you provide your clients with the added measure of service so essential in today’s competitive market.  Elizabeth is a senior account manager at Chicago Title of Washington. She can be reached by phone at 206-618-6786 or send an email to:  Elizabeth.Peterson@ctt.com

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at info@reapsweb.com and be our guest for free!”

Telemarketing is the most under-used and under-rated technique for finding discounted real estate notes. You can get the telephone numbers of most note holders by sending your diskette to TeleMatch (800) 523-7346 or (703) 658-8300. For a very nominal cost they will add phone numbers to your list of Note Holders.

The most important goal of telemarketing is not to buy the note, but to get the note seller to send you the appropriate documents. We have found that if a note seller will go to the trouble of finding the documents on the note, we can close the sale about 2/3 of the time. The problem is, what do you say to potential note sellers when you get them on the phone? The chances for rejection are astronomical, and your tolerance for that rejection will determine your success.

This is a game of numbers. And the more phone calls you make the more success you will have. If you have the telephone numbers of one thousand note holders, a good list of note buyers, and the skill and perseverance to telemarket, you are on your way to huge profits. The structure of a successful telemarketing campaign has four phases:

The Opener

First, develop credibility with the note holder. This must be done within the first minute. We like people who are like ourselves. The first thing in telemarketing is to demonstrate that we are like the party with whom we are speaking. The odds are very good that the person will “like us back,” and we’ll be rewarded with a possible note to purchase.
Evidence shows that people can tell with 90% accuracy whether we are smiling and whether we have a positive or negative attitude toward them, simply by listening to our voices!
There are a variety of ways to make the opening very effective.
You can mail people things. (“We have a special report on how to profit on your note. Would you be interested in a free copy?”

You have sent them something already. (“We sent you a special report on how to profit from your note. Do you have any questions?”)
The Market Study Approach. (“We are conducting a market study on note holders. Do you mind if I ask you a few questions?”)
The Urgency Approach. (“We are buying notes this week only for a special price. Is there any reason you would not be interested?”)
The New Idea Approach. (“We have new and interesting way to buy notes that can give you extra cash, AND you can still keep the note. Is there any reason you wouldn’t be interested?”)
An effective opener depends on your credibility, your manner and your approach.

The Description

The second step is to describe what you can do for the note holder. I have found that it pays to mention only two to four benefits. Note holders have short attention spans and tend to be impatient. They will allow you to move to the close based on the importance of a few benefits.
This is where your active listening skills combine with your ability to communicate the advantages of selling their note to you. A good description is concise and directly meets the needs of the note seller based on your evaluation of why he needs the cash. If you can determine the note seller’s needs, you can craft an offer that will meet them.

“Mr. Note Seller, if we could give you $48,000 now, and you would receive the next eighty-four payments as well, is there any reason you wouldn’t be interested in letting us evaluate your note? We can fund the note quickly, give you best price and service the note for you. Is there any reason you wouldn’t be interested in knowing more?”

The Close

This is the most important part of the telemarketing session: getting the note seller to commit to bringing you the documents. This is not the time to have him sign a contract or commit to any money transaction. It is

sufficient to have him agree to locate the original note, closing statement and mortgage or trust deed and to meet with you, mail, or fax them to you.

Three types of closes are very effective over the phone, according to Dr. Gary Goodman in his book You Can Sell Anything By Telephone!

The “Assumptive” Close

ou assume agreement; you put your self in control of the conversation, so it is relatively difficult for the note holder to say “no.” You might say, “What we will do, Mr. Note Holder is set up a meeting, so we can evaluate the note you wish to sell. We can give you your money in three weeks.”

Notice you didn’t ask if he would sell the note. You assumed it. Unless he says, “I do not want to sell,” you can continue to get him to commit to finding the documents and send them to you or meet with you.

The “Check Back” Close

If you find the “assumptive” close too aggressive, you can soften it by checking back with the note seller to assure him that you are proceeding based upon genuine desire. This is not difficult to do. You can say, “So, I’ll drop by your house tomorrow at 4:00pm to pick up the documents. Is that okay?” The word “okay” is a very persuasive word because the note seller is conditioned to respond positively when they hear it, and they can decline if they want to.
The “Choice” Close

This is the most common type of close, and it is very effective. It offers the prospect the choice between one thing or another. When being asked to select an option, it is unlikely that the note seller will walk away from the conversation with nothing.
The “choice” close is useful in setting appointments by telephone. You can say, “My schedule shows that a good time for me to meet with you would be on Tuesday morning between 9:00 and 10:00, or will Wednesday be better for you?”
It becomes difficult for the prospect to decline an appointment at some time because we have phrased the request in the manner of a choice. If we had asked if we could come by at all, this would make it easy for the prospect to decline altogether.
The Confirmation
When the note seller agrees to meet with you, confirm his

wisdom and understanding of what you expect. You should:
1. Repeat that you will meet him on Wednesday at 7:00pm at his house to look over the loan documents
2. Congratulate him on a wise decision
3. Clarify what you will do and what you expect of him
4. Allow him to ask questions
5. See if you can gauge how likely he is to find the papers and follow through on the meeting
End the conversation on a positive note

“Fine, Mr. Note Seller, we’ll meet at 7:00pm on Wednesday at your house. You will have a copy of the note, deed of trust, and closing statement for me to review. Once again, we work with national companies. We can get you your money in less than three weeks and you can still retain the payments for the next two years. Are they any questions you would like to ask me? Great, I want to thank you for your time and your patience. I will let you get back to Monday Night Football, and I will see you on Wednesday.”

Telemarketing

If you have a scripted idea of what you want from each phone call, you will have a much better chance of getting the results you want. If you have some knowledge of how to make people like you and can develop rapport with the seller, you will be closer to doing a deal.
Remember, the point of the telemarketing program is not to buy the note, but to get the documents. If a note seller will go to the trouble of finding the documents on the note, you can close the sale about 66% of the time.

About the author…
Jon Richards was the founder of NoteWorthy Newsletter, the major newsletter for buyers and brokers of cash flows on the secondary market. It has been published monthly since October 1989 and is the largest paid subscription newsletter in the industry. Jon was the publisher of the NoteWorthy Newsletter until his death in 2003. Jon was a licensed real estate broker, long time real estate investor and an expert in finding, appraising, buying and brokering discounted notes and mortgages. He was the professor and tenured instructor of Real Estate at the College of Alameda in California.

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at info@reapsweb.com and be our guest for free!”