Deed restriction for 30 days

[Adnan H.]

I am in process of buying a wholesale deal for the first time. I have deposited a $3000.00 and waiting on closing next week. The wholesaler called yesterday and let me know that because this was a short sale deal there is a 30 day deed restriction and he would be able to give me the deed after 30 days of closing. I have limited knowledge of this kind of restriction. Can anyone shed some light if this is a legit way of buying a property and what are the risks of closing on a property with this restriction? 

I do trust this wholesaler to be professional but I would like to understand more about what issues I may run into later with this restriction. He also let me know that I can start working on the property from the day I close but deed will come after 30 days.

[Jessica Zolotorofe]

@Adnan H. If he intends to do a "simultaneous closing" because he needs your funds in order to pay the bank for the short sale, then you need some sort of guaranty or collateral to ensure that he doesn't sell it from under you within the 30 days. So, first, I would have your lawyer request of copy of the short sale approval letter to make sure that it actually contains the 30 days restriction. I would then make sure that the title company confirms receipt of an original recordable deed from the current owner to your seller that expressly contains that 30 day restriction BEFORE any money is released from escrow to close. Again, I would also have a fully executed deed to you from your middle-man seller held in escrow with the title company before closing is authorized or money is released. You would have an escrow agreement with the title agent and your seller that provides that that deed will be automatically and unconditionally released and recorded on the 31st day. And to be extra careful, if possible, see if you can get a mortgage on the property recorded at closing of the sale from the current owner to your seller so that you have a lien during the time period that your seller, who used your money to buy the property, retains title, there will be far less risk that he can lien the property or try to pull anything in those 30 days that can be harmful to you or put your investment in jeopardy.