Double closing with a balance left on the home?

3 Replies

HI BP,

I am looking forward to my first wholesale deal soon. My distressed seller wants to get rid of his home but has a hefty balance left on it. Of course i want to make sure i get a good portion from this deal but it seems the only way to do this is to offer the seller less than what he owes on his mortgage. Is it possible to double close on this home at a lower price than what my seller owes as long as the seller is willing to pay the outstanding balance and does that mean the home will be a short sale if he tries to get this approved by the bank? Please clear this confusion BP 

Thank you

Michael P.

If the bank were to agree to a pay off that's less than what's owed, that would be a short sale and you have a lot of work in front of you before that can happen. If the seller is willing to pay the difference then it's not a short sale but it's a little tough to make that happen so that you make a profit that's literally coming out of your sellers pocket. Your target offer to the seller should be at least equal to the payoff or you'll need to work a short sale.

I don't know if that made sense?

Originally posted by @Dick Rosen:

If the bank were to agree to a pay off that's less than what's owed, that would be a short sale and you have a lot of work in front of you before that can happen. If the seller is willing to pay the difference then it's not a short sale but it's a little tough to make that happen so that you make a profit that's literally coming out of your sellers pocket. Your target offer to the seller should be at least equal to the payoff or you'll need to work a short sale.

I don't know if that made sense?

Yes it made perfect sense thank you for the advice. I feel as though to lessen the difficulty of my first wholesale i will just offer the amount owed on the home which would still be beneficial to my buyer.

Thank you

If you are going to wholesale the prop, make sure that they price you are offer and the ARV are some where within the 70% rule.