What Docs are Needed to Close Sale with Title Company?

I am in the process of selling my first property. I just closed on it last Friday through a title company. When I sell it, I would like to just use the same title company to close the sale, assuming the buyer is ok with this process. I have reviewed the masterclass modules for selling land and it includes several documents for closing (most, I believe, for closing in-house and using seller financing). If I want to close with a title company without seller financing, what documentation is needed to get them started? If someone makes me an offer I'd like to accept (via Facebook Messenger for example), do I just send them the 1 pager Purchase and Sale agreement similar to the one I purchased the property with? What if the buyer needs financing... how does that change the PSA verbiage? I do not want to do seller-financing yet, but if they want to take out a loan for the property, how does this affect my initial documentation? Lastly, do buyers tend to prefer closing through title or can this sometimes turn them away due to cost and time?

Thanks, in advance, for any insight.

@tylerd, congrats on purchasing your first property, and good luck with the first sale.

While I've heard (but haven't personally experienced) of some cases otherwise, most well-informed buyers would greatly prefer to close through a title company on warranty deed (or whatever the equivalent deed type may be in that state), as that gives them the greatest level of assurance that they're getting clear title to the property.

Just for some quick context/background on me, I'm trying to get, what would now become, my fourth property sale back on track, so I'm not claiming to be an expert with dozens of sales under my belt. That said, though, I have generally used the same general purchase and sale agreement template for both my purchases and resales; although, you'll want to reread it from the perspective of now being the Seller, and tweak any of the terms that you find appropriate, within reason and ultimately subject to the approval of your Buyer.

Off the top of my head, some examples of terms that you might want to change, between your purchase PSA and your sale PSA would include:

  • Who covers closing costs? I.e. all Buyer, all Seller, some split (e.g. Seller covers prorated share of property taxes, all other closing costs borne by Buyer)?
  • Earnest money deposit - if you don't have an EMD in your purchase PSA when you're the Buyer, maybe you want to add one when you're the Seller to try to weed out tire-kickers/time-wasters (or not; it's up to you)
  • Ability for Seller to cancel the agreement - if you have a statement in your purchase PSA along the lines of, "Buyer may cancel this agreement at any time, for any reason" or something to that effect, you might consider whether you still want to explicitly state that when you're the Seller. In reality (while keeping in mind that I'm not a lawyer), this really doesn't matter a whole lot, anyway, since in most cases and jurisdictions, a Buyer can generally walk away from a PSA with the Seller's only recourse being that they get to keep the EMD, if there was any. The same is not true with a Seller being able to walk away, at will.
  • Contingencies - As investors, often part of what we offer when we're buying property is a quick closing with no contingencies (notwithstanding the ability to cancel the agreement anytime, mentioned above), but when selling property, if you think you're dealing with a Buyer that intends to finance the property (quite possibly only an option if they're ready to build on it right away and have secured a construction loan), then they might expect to have a financing contingency in the agreement; basically saying that if they aren't able to secure financing of X% APR or better within Y number of days, they have the option to cancel the agreement. Personally, even if a Buyer was telling me they intended to get third party financing, I think I'd first leave this contingency out of the agreement, and only insert it if they specifically asked to do so. Just seems cleaner that way, and again, as mentioned above, other than the question of who gets the EMD, it's not like you would be able to force them to purchase the property if their financing fell through and they no longer wanted to buy it.

Aside from the above, I would also just say that if you wanted to, you could get your hands on the vacant land contract template put out by the Association of Realtors for whichever state the property happens to be in, and/or a contract template that the closing company you worked with might be able to provide. Then, don't necessarily scrap your own PSA that you used for the purchase, entirely, and go with the other one, but just read through it and see if any of the terms jump out at you as something that you'd prefer to include, now that you're the Seller.

Lastly, any time that you're in doubt, and especially with your very first sale in a state (or overall), consider hiring an attorney for a few hundred bucks to review your agreement and offer confirmation or edits.

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@dl7573 This is great information, thanks for sharing! I reached out to the title company as well, and they shared their version of a purchase contract. It includes a bit more verbiage than I'd like, especially the financing contingencies. It is definately designed more for housing. I have some good resources now to pick and choose what makes sense for my deal.

@tylerd, I think that's perfect. That's basically what I've done. On my second deal (which was my first in a new state), I was feeling skittish and used the title company's or realtor association's boilerplate agreement, and like you said it was really geared toward selling a house, not vacant land, and was kind of clunky and overdone, for that reason. After that transaction, I've just stuck to a one-page PSA, with any deal-specific tweaks and edits I've picked up along the way added in, as necessary.

Be sure to post on the forum when you close this first sale, with the numbers. I think everybody loves hearing numbers on a good deal. :-) Good luck!

If you are going with a template from a company or a realtor association - be sure and specify the "Unimproved Real Property" contract.

But, I have have no problems with any title company accepting my one-page or two-page contract based on this one from Seth's course. In the sales price section of the contract, I put the full sales price followed by a reference to the additional terms and conditions clause; e.g. "3. Sales Price: $64,000.00 USD payable by Buyer to Seller as specified in section 12. Additional Terms and Conditions." The image below is an excerpt from a contract where I seller financed a large portion of the sale and closed with a title company.


@karljames Thanks for the additional insight Karl! Is the Deed of Trust and Promissory Note then drafted by the Title Company or do you have to provide them a promissory note with your desired language?

The title company, or their affiliated law firm, will prepare it for you.

@tylerd what State are you working in? Happy to share some templates if applicable, as well as how i handle owner-financing through a title [email protected]

@sean-callahan do you typically use a land contract or Deed of trust when closing seller financing with a title company?

I assume when using a title company most people would use a deed of trust and have the title company hold the title but I have also heard a lot of people would much rather close with a deed of trust because it is easier to reposes your property.

@lmingoia - the right answer to that question is usually determined on a state-by-state basis, and what the laws dictate around the foreclosure process.

Check out this blog post for more insights on that.

In most states, you can use whatever you want... but certain "norms" have been established because the state laws make it significantly easier to use one loan instrument over the others.

Tank you @retipsterseth !

@lmingoia in Florida the Title company i most often use will only do a mortgage deed with a mortgage note, so that's the extent of my experience in answer to your question. I convey the property by warranty deed at closing to the buyer.

When owner-financing and self-closing (which is what i do most of the time), I always use a land contract and don't convey ownership until the loan is paid in full.