Most real estate deals that fall apart at the closing table had the problem in them from day one. Nobody found it until the week of closing, when there’s no time left to fix it.
We close a lot of investor deals in Middle Tennessee: fix-and-flips, rentals, wholesale assignments, estate sales. These are the five title problems we see kill deals most often, what they look like, and what to ask before you’re under contract.
The short version: open title the day you sign the contract, not the week before closing. Almost everything below gets easier when you find it early.
1. Seller impersonation fraud: when the seller isn’t the owner
Seller impersonation fraud is when someone pretends to own a property and tries to sell it. They find a vacant lot or a paid-off rental with an owner who lives somewhere else, pose as that owner, and try to walk away with the sale proceeds. The real owner may not find out for months.
It’s growing fast. In the American Land Title Association’s 2026 study, 59% of the title firms surveyed reported at least one seller impersonation attempt in 2025. In ALTA’s earlier survey, 28% reported one in 2023. Those are attempts, not all successful, but investors buying off-market are exactly who these people are looking for.
Red flags to watch for:
- Vacant land, which ALTA found is the most common target
- An owner who lives out of town, or a property with no mortgage on it
- An owner who recently passed away
- A seller who won’t meet in person or get on a call
- A seller who wants to sign by mail with their own notary, or is pushing to close fast for cash
Let your title company verify who you’re dealing with before you’re in deep. Trust but verify. And if it feels sketchy, it probably is.
2. Inherited property: when the owner on the deed has died
Estate sales are some of the best deals investors find, and some of the slowest to close. You get a call about grandma’s house and a grandkid wants to sell. They may not be able to.
In Tennessee, when someone dies, their real estate generally passes to their heirs (if there was no will) or to the people named in the will. The exception is a will that puts the property under the executor’s control (Tenn. Code Ann. § 31-2-103). So depending on the situation, the people who need to sign could be every heir, an executor with the power to sell, or someone acting under a court order.
If a married couple owned the house together with survivorship rights, the surviving spouse may already own it outright, which is much simpler. You just have to know which situation you’re in.
Before you sign anything, ask whether everyone on the deed is still living. If not, keep asking:
- Was there a will, and has anyone opened an estate?
- Who are all the heirs, and do they all want to sell?
- Who is going to sign, and what gives them the authority to sign?
Then give yourself more time in the contract than you think you need. These usually run long, and a missing heir who turns up two weeks before closing can stop everything.
3. Hidden liens and surprise payoffs
The most common title problem is a boring one: an old mortgage that was paid off years ago, but the lender never recorded the release. It still has to be cleaned up before you can get clear title, and if that loan has been sold a few times, tracking down someone who can sign a release can take weeks.
Other liens and payoff problems we run into on investor deals:
- Contractor liens. If there’s been recent work on the property, a contractor can still have time to record a lien after the job is finished. So it may not show up when title is first searched.
- Judgments. A recorded judgment against the seller can attach to their property. So can a name match on someone else’s judgment, which then has to be ruled out.
- Payoffs higher than expected. Default interest, late fees, or a home equity line the seller forgot about. Any credit line also has to be frozen and closed at payoff.
The fix for all of these is the same. Open title the day you sign, order payoffs early, and ask the seller up front about every loan, credit line, contractor and judgment. Then leave some room in your numbers.
4. Tennessee’s wholesaling law and double closings
Tennessee passed a wholesaling disclosure law in 2025 (Tenn. Code Ann. §§ 66-4-401 to -403). It applies when a buyer assigns its interest in a purchase contract to someone else for a higher price. If that’s your business model, you have to disclose in writing:
- to the seller, before they sign, that you intend to market your interest in the contract
- to your end buyer, the nature of the interest you’re assigning
- to the seller, if the contract allows assignment, the date the assignment takes effect, at least three business days ahead
Those disclosures have to be in the written agreement, in bold, large print. The law allows a lawsuit over a violation within two years of the contract, but it doesn’t spell out the remedy. Whether wholesaling requires a real estate license is a separate question for your attorney.
Even when the paperwork is right, these deals fall apart for other reasons:
- The contract doesn’t allow assignment. Plenty of seller contracts and most bank-owned contracts prohibit it.
- The end buyer is using FHA. FHA won’t insure a purchase on an assigned contract.
- The double close counts on the end buyer’s money. In a double close, you buy the property and resell it the same day. Using the end buyer’s funds to pay for your purchase may be blocked by the lender’s instructions, the title underwriter or escrow rules. Talk to your title company before you schedule it, and line up transactional funding if you need it.
- Two deeds means two transfer taxes. Tennessee charges $0.37 per $100 of the price or the property’s value, whichever is higher, on each deed (Tennessee Department of Revenue).
5. The FHA 90-day flip rule: when your buyer can’t get the loan
If you’re flipping to first-time buyers, a lot of them will use FHA loans, and FHA has an anti-flipping rule (24 C.F.R. § 203.37a).
If your buyer signs their purchase contract 90 days or less after you closed on the property, FHA won’t finance it. The contract date is what counts, so pushing the closing back doesn’t fix a contract that was signed too early.
From day 91 to 180, if your sale price is 100% or more above what you paid, the lender has to order a second appraisal, and HUD guidance says the buyer can’t be charged for it. FHA also requires the seller to be the owner of record. There are exceptions, including inherited property and certain bank-owned and government sales, and individual lenders can add stricter rules of their own.
Mostly this is a calendar problem. Count the days from your closing to your buyer’s contract date. If your likely buyer is FHA, plan the rehab and the listing around day 91, and tell your listing agent before the property goes on the MLS.
Frequently asked questions
What is the most common title problem in a real estate sale?
An old mortgage or deed of trust that was paid off but never released of record. It’s fixable, but it can take weeks if the lender has been sold or merged, so it’s best found right after you go under contract.
Can one heir sell inherited property in Tennessee?
Usually not alone. Tennessee real estate generally passes to all the heirs or the people named in the will, so they typically all need to sign. An executor can sign instead if the will gives them that power, or a court can authorize a sale.
Is wholesaling legal in Tennessee?
Tennessee’s 2025 law sets disclosure rules for assigning a purchase contract, including written notice to the seller before they sign and at least three business days’ notice before an assignment takes effect. Whether a particular wholesaling business needs a real estate license is a separate question to ask an attorney.
What is the FHA 90-day flip rule?
FHA won’t insure a loan on a home if the buyer’s purchase contract is signed 90 days or less after the seller acquired it. Between days 91 and 180, a sale at 100% or more above the seller’s purchase price requires a second appraisal.
How do I protect myself from seller impersonation fraud?
Have your title company verify the seller’s identity before closing. Be most careful with vacant land, absentee owners and sellers who won’t meet or talk by phone.
Find title problems before they find you
Most of these can be worked out if you catch them early. Very few can be fixed the day before closing.
If you’re working on a deal in Nashville or Middle Tennessee and something about it looks off, send it to us before you’re committed. We’re an independent, attorney-owned title company on Gallatin Pike, and investor deals are a big part of what we do. You can reach Steven Disser at sdisser@gnt.llc or (615) 865-1470.
We also co-host a recurring morning meetup for Nashville investors, agents, builders and lenders with Alex Dant. Ask us about the next one.
This post is general information, not legal advice about any specific transaction. Laws and lender and underwriter requirements change and depend on the facts of your deal.
