I am rather new and this is my first short sale. I am n WA.
I have an approved short sale property in escrow. It has 3 partners, each on PSA under their own LLC. We have an interested party who wants to take it off our hands (which would cut out one party who was the finance on this deal - he is ok with it) and we are aware that under normal circumstances a short sale property cannot be re-sold for 91 days - or should we say the title cannot be transferred to be exact.
For reasons I won't bore you with, this could be a good option for us to still make some money on a property that even with our wholesale fee leaves an end buyer with a nice profit!
That said, I came up with the idea (and have done most all the research with the State of WA, CPA and an Attorney - who is getting me securities answer Friday) that since I have no properties in my new LLC currently, and it is the one on contract (with the other 2) I could sell/transfer my LLC to the end buyer (not too hard to do this so it seems with the state dept's involved) and then we could get paid and he can take possession immediately with his funds being able to do just a single escrow/close. This saves the double escrow costs and the waiting period and stickiness of doing a rental agreement with new end buyer so he can begin work during the waiting period.
I would really appreciate any feedback from those who may have already done this already and if they had any illegal or immoral hoops to jump thru? I want my integrity in tact and my legal duty in tact as well. I only want to do this if it is above board in all areas.
I would also appreciate greatly any feedback from those that have had to work with the 91 day period and giving possession to new end buyer so they can begin their work on it.
I hope I have made this scenario clear enough so as not to confuse everyone! :-)
Please email me with any feedback or questions/clarifications needed for that feedback!
Thank you so much BP buddies!
p.s. the other two parties would be quit claiming off and we would have a legal agreement with all parties as to how the money is divided and paid, etc... in Escrow.... already working on the draft.
If I understand correctly the buyers on the contract are three separate LLC's? Transferring your interest in the LLC would work, but quit claiming off the other two would still be a title transfer. Have you verified the 90 day resell restriction in the approval letter? Most short sales don't have that restriction, usually just Fannie and Feddie.
Thanks for the response. Yes, unfortunately it is in the letter! I do not understand how quit claiming the others off during escrow as partners would qualify as a title Transfer.
However, thanks for bringing that up. Who would I check with to ensure this can be done not in violation of any laws? Any suggestions?
The title co. Will transfer title to the buyers listed in the approval letter, which I assume is all three LLC's. Quit claiming refers to a title, not to a contract, and is a title transfer(2 LLC's transferring their rights to the other LLC). You can't "remove" the 2 other LLC's from the contract and approval letter without an addendum to the purchase contract, which would require a new Approval Letter, which would require getting the short sale approved with different buyers.....not likely, and time delaying.
Actually the letter states:
2.The Buyer agrees that the property will not be sold within 30 days of the closing and will not be sold within 31 to 90 days of the closing for a gross sales price greater than 120% of the gross sales price of this transaction.
Yes, that's typical Fannie language.
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