Can I assign a short sale?

Foreclosures, Short Sales, Tax Foreclosures
1

If I negotiate a short sale with a bank, can I assign that deal? Will the bank want a proof of funds letter in a short sale scenario?

2

I think they do need to qualify the assignee.

I am working on one right now with Litton and they told me that they will need to pre-qualify the new assingee and will need same down payment from him.

Thanks,
DFW

3

nope, most banks want you to close on it. THen you can wholesale it to somebody else.
The pre-qual letter is pretty standard with most banks. My partner gets one every 3 months, which we use until it exppires.
steve

4

Sounds like assigning short sales is something for an investor who has done a few deals to build up some cash (for down payment, closing costs and proof of funds letter, perhaps from hard money lender) Sounds tough for someone very new?

5

The short sale is not all that hard. You can get a proof of funds letter from hard money lender or your bank if your credit is good. But you are asking about assigning a short sale and that is a different story. I have not been lucky enough to assign any short sales because I always set them up as a double close and that works just fine.

6

So the majority of lenders will not let you assign a short sale? I know this was posted awhile back, but I was hoping for a definitive answer.

Thanks, Gregg-Tucson

7

Correct, a lender will typically not let you assign a short sale.

8

Heres the best way around that. Most lenders will not let you assign the contract nor will they take a look at an assiginable contract. The easy way around that is while working the short find a buyer that would be interested in buying the property. Call the lender and tell them you need to change the name on the Contract to the new buyers name They will allow you to change the name when short sale is close. Another great way is to keep in mind there is no reason to even offer under your own name anyway offer under a S-corp and sell the corp. You can also try a double close. Hope this helps.

9

Thanks for the great input. Short sales only, I actually completed my first shortsale about two months ago by changing the buyers name before the close. The short sale was approved and we closed on time.

Unfortunately, I did not get paid for the deal at closing. I was very naiive and told the rehabber that he was to pay me 10k at closing. He agreed and came to closing but did not have the money(who didnt see that coming?). I eventually got paid but it took nearly a month to get the money

My question is how can I put the purchase contract into the buyers name and still make sure I get paid at closing. Im guessing I can work something out with title company on the HUD. Any suggestions or advice from the pros is appreciated

thanks-gregg, tucson

10

That is where it is nice to use the S-corp contract the property under the S-corp and sell the s-corp for the 10k. No Money no sale period. The main thing in this Industry is to keep it simple the more on the hud the harder it is to loan sometimes there are about 10 ways to make sure you get paid this is the easiest way that I use.

11

:cool The banks I have worked with do not want to work with someone assigning a deal, just in case you cannot get it assigned and have to walk away from the deal. In today’s real estate enviroment, I am seeing the lenders moving towards a lot less “messing around” with assigning, double closings and flips.
I really think it’s time to drill down a little deeper, moving past the assigning and double closings; which I completed for years. Just my two cents.

12

do you still feel this way now…? with many lenders going belly up…
I bet CW will be alot more motivated after what has happened in market…

Mohegan