Short Sales - Why You Need the Deed
There's something we haven't even talked about yet. One of the big, big things preventing other investors from getting paid who know enough about short sales to negotiate with a bank but haven't actually done a short sale yet. If you're like me, getting started was hard especially if you've taken another program that is incomplete and doesn't explain these things in detail. So what is this issue?
Title Seasoning Issues
The Loophole: Ask for the deed now
Lenders are taking a long time to do short sales. Because you put the deed into a land trust that you own, the title will have been long enough that you won't encounter seasoning issues. Even if it has only been a week, the land trust will look as if you've been the owner all along. Therefore, you won't have the typical stumbling blocks that other investors have encountered.
So the next time a seller asks you if they have to give you the deed to their house, the answer is a definite yes! Otherwise, chances are that you or your end buyer will not be able to close on the property when the time comes. Don't be afraid to be honest and tell the seller this. In fact, not giving you the deed may cost them with foreclosure by you not being able to close.
So long story short, if you don't get the deed, you probably won't be able to close the deal and neither will your end buyer unless they don't require traditional financing. Otherwise, if you actually want to get paid and have a seller off the hook for foreclosure in the end, warranty the deed to the property into a land trust named after the property address or the home owner's name.
You'll thank me in the end when you get paid.
Title Seasoning Issues
Lenders are starting to want to see your name on title for quite a long period of time (usually 3 to 6 months but it varies all over the map depending on the lender). Well because you were smart and you warrantied the deed into a land trust that you own, you won't have that issue. In fact, if you were smart and did what we told you and made the trust the seller's name land trust or the property address land trust, the lender will look and think you've had that property all along. <a herf="www.theinvestortoday.com">real estate investing</a> isn't easy after all or everyone would be doing it.
The Loophole: Ask for the deed now
Lenders are taking a long time to do short sales. Because you put the deed into a land trust that you own, the title will have been long enough that you won't encounter seasoning issues. Even if it has only been a week, the land trust will look as if you've been the owner all along. Therefore, you won't have the typical stumbling blocks that other investors have encountered.
So the next time a seller asks you if they have to give you the deed to their house, the answer is a definite yes! Otherwise, chances are that you or your end buyer will not be able to close on the property when the time comes. Don't be afraid to be honest and tell the seller this. In fact, not giving you the deed may cost them with foreclosure by you not being able to close.
So long story short, if you don't get the deed, you probably won't be able to close the deal and neither will your end buyer unless they don't require traditional financing. Otherwise, if you actually want to get paid and have a seller off the hook for foreclosure in the end, warranty the deed to the property into a land trust named after the property address or the home owner's name.
You'll thank me in the end when you get paid.
Comments (1)
you may want to explain what a land trust is. Thanks
Robert Wright, over 14 years ago