Quick Answer
Some title companies are optimized for conventional retail transactions and may have less experience with assignments, double closings, private financing, distressed property, rapid resales, LLCs, trusts, and creative structures. This does not mean all traditional companies struggle, but it is important to know whether your title company has handled your specific transaction type before.
The real estate industry has many excellent title companies that handle standard retail transactions efficiently. These companies are well suited for a buyer purchasing a home with a conventional mortgage, moving in, and holding the property for years. But investor transactions often fall outside this operational comfort zone.
Example: Double Closing
An investor contracts to buy a property for $200,000 and has already lined up an end buyer at $230,000. The investor has transactional funding to close the first leg and expects the second leg to fund from the end buyer's loan proceeds. This is not one closing; it is two separate transactions happening on the same day, with different buyers, different funding sources, and potentially different lenders.
A title company that has never handled a double closing may not have the procedures or underwriting support to manage the fund flow, coordinate with transactional funding sources, and ensure both legs close properly. For more detail, read our guide on double closings.
Example: Distressed Property
An investor buys a distressed property at a significant discount. The property may have been vacant for years, with unpaid taxes, an old mortgage that was never released, a prior owner who died without probate, and a judgment against a former owner. A title company inexperienced with these situations may list everything as a requirement without evaluating what can be cured quickly, causing the deal to fall apart while the investor watches a good opportunity slip away.
For a discussion of common title problems in such properties, see title considerations for distressed properties.
Complicated Does Not Automatically Mean Improper
One important distinction is that a complicated transaction is not necessarily improper. An assignment, a double closing, a subject-to transaction, or an owner-financed deal can be perfectly legal and aboveboard. The question is whether the title company has the experience to distinguish between a legitimate structured transaction and one that presents genuine risk.
An experienced investor-friendly title company evaluates the structure, understands the business purpose, and works through legitimate transactions rather than rejecting them because they are unfamiliar.