have anyone

Foreclosures, Short Sales, Tax Foreclosures
1

Have anyone did a short sale without getting the deed?
Do anybody recommend that? just say the home owner dont want you to take over the deed but they want you to do the short sale what should you do?

thanks…

2

Howdy Focusonmoney:

You may be a bit confused here. A short sale is where the seller owes more than the property if worth and the lender agrees to take less than the loan amount to help sell the house. The borrower is in default on the loan too most of the time. You are paying cash or getting a new loan and willllll for sure get the deed as the seller really has little to say in the matter.

If you are talking about a sub2 deal where the seller remains on the mortgage then the seller may very well not want to deed you the property. There are several ways around this.

  1. Have title company hold the deed in escrow or trust until you have paid the loan off or perhaps the seller would agree to your making 12 payments on time and then allow the deed to be recorded.
  2. You could just lease purchase or lease option the house.
  3. Do a contract for deed agreement. This is not very popular in Texas and maybe other states too.
  4. Walk away or at least threaten to. Just the threat to say no and walk away may put you in the drivers seat.

Thata about all I know to do, If the seller is not motivated enough you may not even have a deal worth doing in the first place.

3

Im not confuse i know the difference…I heard before you short sale you should get the deed and put the property in a trust. The reason for this is just in case the seller wants to back out , decides not to sign anymore documents, decsides not to answer anymore of your calls and etc…mean while you still in process of short saling a deal…now you are stuck and waste all that time for nothing.

Basically what im saying is you would be working for free if that happens…

4

Howdy Focusonmoney:

Sorry about that. I made another mistake and assumed something instead of verifying the facts. This can be costly in REI too as well as relationships.

There are a lot of reasons the deal can go bad and your point is well understood. You still have the seller under a sales contract and could tie their property up in court if they decide not to go thru with the sale. I can see their side too and what happens if the bank decides not to accept the sale or if you decide not to follow thru with the sale too. The deed in escrow would be a good alternative or just the sales contract would be enough for me to still try to get the short sale to happen. Pretty much the only reason the seller would want to back out is if they win the lottery or get a better offer both of which are unlikely.

Either way you go you should be in control and be the one that walks away if the deal is not good enough. The seller has to be motivated if they are in default and want out either due to divorce or loss of job etc.

I hope I did not offend you by assuming that you were confused. I am just trying to help. Please do not hold it against me.

5

Dont worry about that im not mad. I know you was trying to help me and im thankfull for you helping. So basically a purchase contract is good enough to deal a short sale, thats cool to know because thats less work anyways…

thanks once again :wink:

6

I have yet to do a short sale, but here is what I understand from my readings, seminars and asking others. The best way to avoid that problem is when you first meet with the person have them sign a warrenty deed to trustee. Be sure the trustee is a name for your land trust and you have the name of your trustee on it. Do not put your name on it! Also, have them sign 2 Purchase and Sale Agreements, one for your files and one to send to the lender. From what I have been told by the time a short sale is possible, most people don’t care or are in desperate need to avoid foreclosure. Also, if they are staying in the house, you actually want them to not cut the grass, leave out the trash and generally make the house nasty so as to drive down the BPO.