I negotiated a short sale and have a qualified buyer in place. He’s approved with Countrywide.
I negotiated the property down to 133k and am reselling it for 149k. I was told by the loan officer that FHA doesn’t allow assignments. … Wth?
How do i get paid. I’m not a realtor and have control of the property. initially i made an offer to the homewoner contingent on me being able to negotiate a short sale, well, i finally did. Can i get paid a service fee? how can i get paid?
If the contract with the selling lender is in your name, you have to close it in your name, which means you come to the table with money to close.
There are some companies out there that will temporarily fund a deal for your closing until the closing with your end buyer, but lets see for your $133k purchase, closing costs will be I estimate $4k and then your selling closing costs to your buyer say $3k and by the time one of these temporary funding companies gets 50% of the profit for short term funding.
Then when you figure your expenses and taxes, wow!
It means you probable worked this thing for less than $3500 bucks.
If you do a “Short Sale” with a lender you have to close in your name, you can not assign, double close or creatively finance your deal in anything other than your name.
There is a guy here on REI Club who does temporary financing for these kinds of deals, post something in the financing section to find him.
Your going to have to move quick and I hope your deal does not have a 30 day reconveyance clause or you will be holding this property for 30 days before you can close to your end buyer.
The only way you get paid is buying the property in your name!!!
A “SHORT SALE” legally has to be closed in your name!
Good Luck,
GR
get the bank that approved the short sale to allow you a consulting fee for putting together the deal. it can also be called a property preservation fee. either way it must be on the HUD and the seller has to agree to it on the sales contract.
I like keep my hud clean to prevent unnecessary question. Therefore I wouldn’t advice to put a consulting fee on the hud…u may get the short shut down like that.
If you negotiated as an investor buyer, then you have to close two transaction. The way you get paid on that is in the margin between the 2 transactions. Consult with your attorney for what method they are most comfortable. It can vary from one attorney to another.
Any way, I advice to avoid strange fees on the hud.
Tux Lawrence
When you negotiate a short sale you will have to obtain temporary transactional funding so you can cash out on the back end. You can typically find this type of funding from 2 to 3 points on your purchase price. You may be able to negotiate a lower price depending on your relationship with the lender. You also have to set the closings up on the same day because that is all you are supposed to hold your lenders money for, 1 day.
Lender short sale approvals are never assignable. So you will have to do this for all of your short sale transactions that you plan to wholesale or wholetail…lol
Now on to part 2… You will never be able to use an FHA end buyer to sell your property to on the B to C transaction. The lender that is backed by FHA has guidelines that the prior owner of the property has to have taken title for at least 90 days before they can make a new mortgage for your C buyer.
There are ways to structure these deals within a land trust where you can use FHA buyers for your transactions. Some say this is a gray area but the technique does work. Some sates this is the prefered way to structure short sales because of the long redemption period.
So if you do not know how to structure the deal within a land trust then you are going to want your end buyers to stay away from FHA. Have them go for conventional fianancing and make sure the loan product they get does not have a seasoning requirement on the title or your deals will blow up!
Aren’t you buying the house and flipping it? As long as you bring the money to closing that works fine. You need to make sure however that the title company is flip friendly.