Putting a short sale home under contract?

Question

For example, house has a listing short sale price of $50,000 is it possible to negotiate the price with a listing agent, put it under contract and wholesale to one of my buyers?

James Hiddle · Answer

J Scott said this in another thread. I suggest you heed the advice:

"I would highly recommend NOT trying to wholesale short sales these days. You will be required to sign an affidavit at closing indicating that you know of no transactions or agreements currently relating to the property that haven't been disclosed to the lender. If you have an end-buyer lined up already, there IS an agreement and your signing that affidavit would constitute fraud"

J Scott · Answer

I'm not an attorney, but in my opinion, that's absolutely fine, as long as any agreement to sell interest in the titling entity isn't entered until after the purchase.

Of course, that comes with the risk of not being able to sell it...

EDIT:  I guess the other risk is that -- assuming you quickly disburse of the property/entity -- the lender makes the argument that you must have had an arrangement in place, even if it wasn't in writing and no money had yet changed hands.  So, I'd be very careful...

Kyle Weimer · Answer

If you don't have a contract signed with a buyer at sale time, you can still do an LLC assignment. Selling your interest in an LLC you own is not a crime nor is it fraud. I can do with my company what I wish at anytime.
J Scott if you disagree please state your point of view.

J Scott · Answer

Sure, but the bank won't approve the sale.

Again, you'll have trouble getting the bank to approve the sale if you disclose that you'll be reselling and you'll be committing fraud if you don't disclose.

Plus, most banks have a required hold period after you buy before you can sell (30, 60, 90 or 120 days, depending on the bank).

If you don't mind holding for 30-120 days before you resell (and don't have an end-buyer contract at the time you purchase), that should work.

Fredy F. · Answer

Can I have the listing agent sign my contract that says I am planning on wholesaling the property to someone on my buyer list?

If a short sale home is listed at $25k, can i put this home under contract, and sell to someone on my buyer list for more??

Putting a short sale home under contract?

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