Im paying cash for my brother's house...Do I really need to hire a title company?

Question

My brother is in a bit of trouble with his mortgage company. He has an ARM that has gone from 5.9% to 9.9% in 7 months! So Im going to buy the house (with cash) and allow him to continue living in it and just pay me a more affordable payment. I've received the payoff amount so Im assuming I just wire the funds? At least, this is what his mortgage company told me to do. Then they said that it would take 14-17 days for "a refund"?? I don't understand that one, but anyway, They said that then they would send the payoff info to the county stating that there is no longer a lien on the property. So, how do I get this into my name without spending thousands on a title and escrow company or an agent??

Wow! What I wasn't looking for was to be insulted! I'm paying $140,000 and I was told that a title company could add $3000-$6000 onto that. Im simply trying to avoid any additional costs since this is ALREADY costing me $140,000!

Btw, I have no wife that will "take half". I AM a woman.

Answer 1

First off, a title company DOES NOT take 3K-6K. Typically the title company charges about $600 for title insurance, and then around the same amount for the escrow portion. You could probably get away with paying $1000 or less ont his deal.

It sounds like all you've got figured out is how to pay off his mortgage....but this doesn't transfer ownership. You also need a warranty deed to be signed and recorded w/the county. Your brother has to pay excise tax (typically 1.8% on the sale. You want a title report to be sure on one else has put liens on the property without his knowledge (because they are against the home, not him individually).

You dont need an agent at all. Just Draw up a simple purcahse and sale agreement and give it to a title/escrow company. You can call around and get the cheapest rates, if neccessary. Since you're paying cash you probably dont HAVE to have title insurnace, which means your title/escrow costs will be fairly inexpensive. Then there is just a nominal (about $50 ) recording fee.

The escrow company can handle wiring the funds to pay off the original mortgage. They'll also tell you if they can get around the excise tax since you guys are family members. . .

Answer 2

You absolutely want to have a title company involved. The title company will make sure that your brother has clear title and is able to transfer said title to you. They will check for liens, clouds and judgements that could possibly effect the transfer. It will take 14 - 17 days for it to fund I suspect, not refund, meaning that the bank is compensated and everything is transferred.

You don't need an agent, but you absolutely need a title company. You could be spending alot of money for nothing if the title isn't transferrable. It may seem like a little detail, but it is not, it is huge. I cannot emphasize this enough.

Answer 3

You're paying off someone else's mortgage, laying out probably around $200,000.00, and well aware that you don't know what you're doing because you don't know what the "refund" is, and you're apparently unaware of what they're going to send to the county, and you want to know how to get it into your name (which you really don't want to do, but that's another point entirely)....

and yet you're unwilling to spend a little money for a lawyer to make sure it's done right and you're protected.

Look, I do this for a living. For about a thousand dollars in costs that your brother should pay, I could get this structured the way you really want it, protect you against your brother not paying you, ensure that the current mortgage really does get cleared, and basically look after your interests.

However, if that's too much for you, you can pay twice that to fix it when you screw it up on your own.

Go on and do it yourself if you want to, and listen to advice here from people who may not know the particulars of your state, but my advice is to hire a lawyer.

Are you married? If so, I can assure you the day will come when she says "You shoulda hired a lawyer", and once they tell you that, you will NEVER hear the end of it.

edit: If you do this right, it won't cost you a dime. If you screw it up, it will cost you 140,000. the difference between doing it right and screwing it up is hiring someone that knows what they're doing and will look out for your interest.

Answer 4

Escrow potential a third self sufficient individual will carry and than disperse the money at remaining. identify coverage potential that the identify company is insuring that they do their job wisely and in the event that they screw up you would be compensated. Are you making use of a real supplies agent or an criminal expert?? the two way take their advice, the quantity you pay them could desire to be not something while in comparison with what they could shop you interior the long-term. specific specific specific get it inspected, the identify company will examine and notice that the deed is sturdy, yet not something. as far as a survey, the valuables will already be recorded by the county. you purely isn't waiting to alter its barriers whether the surveyor tells you one element and how that's listed with the county(criminal description) says yet another, till you're waiting to spend some $$$$ and time in courtroom. Even that would not propose it is going to finally end up the way it "could desire to". yet while the business enterprise made a "mistake" with regard to the dimensions of the valuables or the place they think of the barriers are you would be attentive to and use that as a bargaining chip.

Answer 5

Yes to protect yourself.