Asigning a short sale 21 posts by 15 users

Posted: 09/02/2008 at 06:39PM

When you negotiate a short sale, the bank really expects you to be at the closing table. It would be fairly difficult to assign a short sale.

Upon negotiating and submitting your offer the bank will want to be presented with a contract. If the contract is an assignable one, the bank most likely will not even negotiate with you.

In todays climate banks are looking to deal directly with the buyers especially when it comes to short sales.

I would figure out how to buy the short sale property first and then resell it.

Posted: 09/03/2008 at 02:27PM

Dan,

Are you refering to same day closings?

Posted: 09/03/2008 at 04:43PM

We do cash purchases and assign the contracts all the time. If there is any finder's fee to be paid, it can be done on the side. If your a realtor you can get the entire commission. At least that's what's worked for me.

Posted: 09/04/2008 at 02:59PM

Never thought of selling the corporation to the investor.

Thanks Dan

Posted: 09/10/2008 at 12:12AM

Problem with short sales is this. Most short sale investors do not have the money to buy, then fix, then sell, hence they find an end buyer.
Some of you know this and your first thought is to assign the short sale contract. HUGE PROBLEM!

Banks are getting weary of investors wasting there time with offer that goes no where.Short sales cannot be assigned. The lenders ALL put that restriction right into their approval letters ––the buyer cannot be substituted.
Most short sales are bought by an end buyer who is going to get financing from a mortgage company/bank. Well, all those lenders have seasoning requirements. When you buy and sell quickly you create a seasoning problem.
Alot of investors went to jail last year. Do not be one of them.Don't take my word for it. Talk to your own attorney.

To satisfy the seasoning requirements here is a hint:equitable interest!!!

Posted: 09/15/2008 at 10:46AM

Tom,

Uhhh...Mark was asking about avoiding seasoning issues and tranfer tax, not creating a taxable event by selling a corp. You won't hear about that on late night infomercials. ;-)

Mark, you've received a real mixed bag of replies to your question.

Weigh the facts and make your own decision. If you consult your attorney about the legal ramifications, print this thread and be sure to ask for clarification regarding what I mentioned.

On a side note...also ask your attorney about any potential problems with your using the words "Property Rescue Pro" in your business name.

Posted: 09/16/2008 at 10:41AM

I agree,
Dan you are knocking them dead. Good Call!!

Posted: 09/30/2008 at 03:59PM

Hmmm..... I have wholesaled both a Foreclosure AND a Short
Sale. Minor issues with both but it was done and with out selling off in an LLC.

Robin

Posted: 10/05/2008 at 03:05PM

I, too, have completed several short sales this year using an assignable contract with a double closing using a title company.

What makes an assigned short sale successful?

1. Full disclosure
2. Credibility
3. Using a reputable title company
4. Have an attorney on your team
5 A good buyers agent.

The second most important element that will make it successful is using an AAR contract. I believe this will lend your deal more credence. Plus, it forces full disclosure.

The third most important having good team members. I use an experienced agent and have a very good RE attorney.

If the lender drags their feet, makes senseless demands, or passes on a contract, my attorney will make phone calls or send letters to their legal department.

Now, I cannot overcome every deal and I have been unable to assign contracts on many more deals, but you simply cannot say that lenders are not doing them.

What is the most important element for a successful (assigned or not) closing?

Writing a successful propsal is the most important piece for a successful closing. The lender needs to be convinced that it is likely to spend more money on the foreclosure than a short-sale. They cannot feel as though your taking advantage of them or their client. The deal must make equitable sense for all parties!!

So, if your planning to make 20% or more on an assigned contract, then you need to FORGET IT!! Lenders will invoke seasoning, non-assigned contract clauses, or whatever they can do when they see your making a lot of money!!! Keep your margins under closer to 10% and you will see more deals close.

Another thing, seasoning is not been an issue for me either. I actually closed on FHA financed purchase with an assignable contract. Again, this is where the equality will come into play.

Greed has gotten us where we are now and if you take a self-serving approach to your wholesaling, you will not be very successful.

Good Luck All!!

Posted: 10/05/2008 at 06:43PM

Great comments,

Banks are staying away from the squirrely deals. But, if you keep your deals clean and legal there's still a lot of money to be made.

If you want to flip short sales in my opinion....is safer and less stress to simply take a month out of you busy schedule, spend $500 bucks, pick up a real estate license and build you profit into the commission.

We're fortunate here in Texas. We're still able to perform net sales transactions, (all proceeds above seller net considered commissions), as long as you can maintain fiduciary reliability.

Also, I would avoid talking about you know what....in an open forum....lol.