Should You Sign Foreclosure Deeds Alone?

March 20, 2007 by David Cowgill

I’ve personally never invested in a foreclosure deal so I’m only writing about this based on a story I heard from someone else. It’s tough enough to find a gem like this but if you do, here’s how to play it out.

So you’ve stumbled on a piece of property and the owners invite you to come over and during the second cup of coffee they make a deal that can’t be beat. The only bad thing is that they are leaving town tomorrow and won’t be back for a closing for three weeks. Being desperate, you reach into your bag, pull out your laptop and printer and do a self-prepared deed and close the deal right in the kitchen.

After all, you’ve seen it done on television ads for years and you know a few folks who have acquired hundreds of properties and saved in closing costs for each of them. Here’s what you should think about
the ‘kitchen table closing’.

DO not do them as a standard way of business. You will be deemed the scam artist of the real estate world.
DO not do them as a way of saving on closing costs. You probablywon’t save much anyway with this method.
DO not make your kitchen table closings part of your spiel to buy property. They DO NOT hold in court in most cases
Some people will refute them if they change their mind.

Now that you have a great view of this style of real estate closing, let me tell you a few more things about kitchen table closings.

Do them. If you feel that a seller may be flaky, do the closing at the home right there. It’s better than nothing.
Don’t use them. Have these documents as a backup in case your seller fails to show for the ‘real’ closing at the title company.
Keep those documents handy. Most sellers are willing to understand them as a legal contract and will follow through, if not, you’ll at least have something to show in court.

It’s always good to get something in writing from a seller when an agreement is made. I have seen too many deals go down the drain over a hand shake and five days between the deal and the closing. All-in-all, be honest and don’t get greedy. If one deal flakes, keep walking the streets and find you another property to invest in.