Investor · Buda, TX · Member since 2016 · 137 posts · 55 votes
I have a multi under contract with the bank soon to expect the offer (based on seller's agent). I am thinking of working to market this and do a double close since I know I cannot assign. I have set it up where I will be responsible for the title policy as it is my understanding that this creates the need for only one title policy in a double close and not two (of course need to confirm with title co) during a process like this.
My questions are this:
-What to watch out for when doing this, are there are any legal issues with marketing a short sale like this?
-At what point do I approach the title company of my intentions?
-Any other general advice from those that have done this.
UXBRIDGE, MA · Member since 2017 · 3 posts · 1 vote
8y
Hi Eric....you brought me back to the short sale bonanza days. From 2008-2012ish we did tons of B2B short sale deals. So if you're planning on setting up a double close a few things should be in place.
1. Do you have the (A) seller under a purchase n sale with an option agreement?
2. A Notice of Option is typically the best way to hold a position on the ability to buy n resell to the end buyer. You can record that or have it held in escrow. recording it clouds title and discloses to the public your option without disclosing price and terms of your purch n sale.
3. Disclose to the end buyer and the agent so that it is transparent that you are buying and reselling to them
4. the end buyer should either be buying cash or their closing company know about the option so that there is no issue with underwriting with the buy n resell
5. make sure there is no stipulation with the short sale lender that does not allow you to flip, Some have restrictions on the flip and or for % of profit.
6. Always perform a "wet funds" closing. That is close with your own funds on the front sale and then have the end buyer close with their funds....AND make sure their funds are in escrow with the closing agent before you close.
All the best on your back to back short sale deal!!
UXBRIDGE, MA · Member since 2017 · 3 posts · 1 vote
8y
@Wayne Brooks , it is mandated also by the servicer. they're guidelines iin place for reform, but most lenders dont follow it. Whatever the short sale appvl and states is what it is.
Investor · Los Angeles, CA · Member since 2012 · 1k+ posts · 500 votes
8y
Ensure to read the approval letter, affidavits, etc. At times there are deed restrictions for 30 days, or for 90 days for more than 120% of purchase price or other potential variations but those are the two most common