BiggerPockets

I am going to JAIL because I 'Flipped' a Short Sale

Friday, October 30

Just kidding LMAO!!!!

I just felt like making myself laugh today and I hope you chuckled a little bit too. 

I mean, C'mon! knock it off with all that. Do it right, and prosper, be an idiot and enjoy the confines of a not so pleasant gated community. 

I wanted to take this opportunity now that I have you undivided attention and not just clear the air but show you how to keep your ASSets out of Bubba's hands so to speak. 

I'm going to discuss the things you need to have a 'Fully Disclosed Transaction' and a 'Not Properly Disclosed Transaction' 

I got this great little bullet point list from the most recent AZREIA publication where a title agent who knows here stuff discusses these things and I felt compelled to share it with you so that the next time someone tells you, you're going to jail, you can tell them to pound sand!

Fully Disclosed Short Sale Transaction includes:

• Putting "all parties are hereby made aware that buyer reserves the right to resell this property within the next 30 days"

• Long, Plain Language disclosures that are in a easily readable format

• The Seller retains his interest in the property until the liens are paid in full

• No relationships exist between the buyer(s) and seller(s) unless approved and noted by the lien holders. "An Arms Length Transaction"

• Disclosing to the Buyers that you are purchasing the property to resell it to them.

• Making sure the seller is aware of any potential consequences or implications with the lenders and/or with revenue offices after the issuance of the approval letter(s) and prior to close of escrow.

Not Properly Disclosed Transaction would be:

•   Not disclosing to the short sale lender that your intent in purchasing this property is to resell it for a profit.

• Not disclosing to the homeowner that are you reselling the property for a profit.

• Requesting that the homeowner deed the property over to an investor prior to close of escrow.

• Doing transactions with LLC's or friends and relatives so that it appears that someone else is buying it, but the original homeowner is really the one behind the deal.

• Not informing the buyers that you are in negotiations to clear the title. Also not letting them know there is a potential for extended closing dates depending on lenders response time.

• Not having the seller sign off on the short sale approval letter(s), so they are unaware of the full implications of the transaction.

So there you have it.

Use these as guidelines to make sure you Virginia ASSets stay unpenetratable if you get my drift. Tell the nay sayers to pound sand! They're obviously NOT doing it right and NOT making any money so they want you to join their pity party. 

Comments

1. 

   Joseph Ziolkowski Reply
   over 2 years ago

   Great stuff Nick. This is the little things the so-called courses sometimes don't mention as much as they should.

2. 

   Jon Klaus Reply
   over 2 years ago

   Would you be offended if I said you sound like a lawyer?

   Do you have "magic words" for avoiding the IRS pokie, too?

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