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Forums » Short Sales » SS on New Construction property

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Tag Tags: new short-sale


Shane Schaetzel

Real Estate Investor · Mayville, Wisconsin


Forum_avatar_avatar-westonhunter

Sep 14 '10, 08:10 AM

Hi all,

Question is in regards to a property that is a potential short sale opportunity.

Property is roughly 85% finished. Original lender went belly up and is now serviced by another lender who has discontinued funding on the construction loan. Lender is willing to sell short on property.

My question is on potential exit strategies. I was thinking I would have to attract a cash buyer as my only out. Has anyone else completed this type of transaction? Any thoughts or suggestions on the process?

Thanks again,

Shane


Dan Koch

Real Estate Investor


Forum_avatar_avatar-bdwp

Nov 09 '10, 08:23 AM

It's like any other short sale. The contract is contengient upon lender's approval. If you stick to your guns in negotiations you will have 30 days after the Payoff Demand Approval Letter is issued to close on the property.

In Wisconsin you can start to market the property before you take title and become owner of record.

Depending on how your paperwork is set up on your end you are either going to have to go into this with an option contract (which the lender will shoot down 99% of the time) or go in on a State Realtor's contract.

On the other end you can get a limeted power of attorney from the homeowner (borrower) that allows you to remarket the property before you take title and become owner of record. So you can start marketing for your cash buyer before you take title of the house.

Make sure you file your notice of contract so you are protected in this.




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