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Part III of Our Investor Series:
"How To Insure Seller-Financed Properties"
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INSURING WRAP-AROUNDS:
TAKING BAD ADVICE FROM TRUSTED SOURCES
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| by Kelly Troy |
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If you are involved with seller-financing and you have read any of my articles regarding insurance for these types of transactions, specifically wraparound mortgages, you have probably picked up on a common theme running through all of them - which is that there is a lot of bad advice being given by people with little or no knowledge of insurance and it can cause you, the buyer, and the loan servicer BIG problems later on. This includes Realtors, attorneys, and even other insurance agents and brokers. In fact, we ourselves have heard advice that is not only completely wrong but which can almost certainly be construed as intentional insurance fraud - and this was from another insurance 'professional' with years of experience.
The reason for this misinformation is because insurance is often treated (at best) as a commodity or viewed (at worst) as a 'necessary evil'. This apathy and the general lack of importance attached to insurance is what drives the ability for those with no actual insurance knowledge to become 'overnight experts' with the ability to direct the insurance-purchasing decision of others. In addition, most licensed insurance agents are simply salespeople that have no first-hand experience with real estate, property investing or contract law and who make very little effort to educate themselves with anything truly insurance-related beyond just the bare minimum knowledge required to sell a basic policy.
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