Short answer: not until it's cleared. When a wholesaler or buyer records an "affidavit of contract" or similar notice, title insurance won't insure clean title, and no lender will close.
A real example
A Pennsylvania owner had a hard money letter of intent in hand when a wholesaler, after trying to renegotiate, recorded an affidavit of contract against the property. The loan stopped until the claim could be released.
What to do
- Order title early so surprises show up before closing week.
- Get a written release from the party who recorded it, or work with a real estate attorney to remove it.
- Be careful what you sign with wholesalers.
Related: Bridge loans