Hi, thank you all in advance for viewing this. I am new to this forum and I think it’s a great way of networking and sharing knowledge.
I am currently in the final stages of completing a short sale. The bank is offering the house to us for $80k. We have a buyer ready to buy it for $91.5k and we plan to put the $11.5k as a finder’s fee and/or as a bill-of-sale on the HUD-1.
However, the buyer wants to take out a loan for $120k, and receive the cash back at closing so he (the buyer) can use the money to do the repairs.
The problem is that the bank most likely will not give it to us if they see a loan amount of $120k for a $80k house. They won’t approve of the short sale.
So does anyone have any suggestions on structuring this deal? How can we structure this deal so that the bank gives us the home for $80k and we are able to use the remaining $40k for our finder’s fee and cash back for the buyer.
I am a newbie investor, any help would be greatly appreciated. Thank you.
Did a deal a few months ago just like this. Here’s what we did, but I’m applying your numbers:
- Do a double closing. You buy from the bank for $80K.
- In the 2nd contract b/w Seller (i.e. you) & the buyer, the purchase price is $120K, but the contract amendment stipulates that the Seller is responsible for 120K - 91.5K worth of repairs, and the projected repairs & cost were included in the amendment. Note, the contract also stated that the Seller paid 2% of the closing costs
- The Title Company disburses all funds & you get a check for the left overs.
Note: In my case, my buyer knew how to write the stuff in #2 into the contract & I read it & signed off on it.
Thank You! We spoke to an attorney who deals with this situation often,
and that is what he recommended as well… now we just need someone more
We own a property worth around $940k to $980k and will go on short sale. When we called hud they said to advertise it for $740k, now my question? Do I advertise as $740k or higher…i was reading some forums that the bank might deny them and that would prolong the problem. Hud told us an agent will be calling us soon to help us list our property. I’m a new agent too but specializing in a different county. Can someone help me figure this out?
Help from Northern California