You dont mean like putting a pre-foreclosure property into a land trust transfered to an investor w/o the banks knowledge then going to the bank and asking for approval of a sale 50% off FMV based on an appraisal/bpo that was highly influenced to come in well below value, then using an end buyers money to fund your side of the deal without their knowledge or consent? Illegal and unethical…? what ever do you mean …? 
Negotiate and demand a loss mitigation fee paid you. You PRO ACTIVELY solved this PROBLEM that the bank did nothing to help fix. You got in touch with both seller and buyer and did all the paperwork and put up with all the bank’s pure bull s#$t “paperchase” and “phone tag” CRAP I’m sure. They did absolutely nothing to remedy the situation. You deserve every damn penny of that loss mit fee, especially if no realtor commissions were involved…
Either that or tell them to take a hike - good luck at the auction!
I like your attitude njss LMAO :smile
Flipping is not illegal - ever seen that show called “Flip that House”? Fraud is what is illegal. 2nd, all you need to do is disclose and be upfront and honest about whats going on with everyone. It’s usually the lenders who have the issue. How can you sell the house to someone if you do not own it? You don’t own it if you are not on title. You don’t need to use a Land Trust, which is just smoke and mirrors anyway. I like to just plan it as a double closing. If the lender has an issue with this, tell them to work out the rest of the financing and you will get on title. When they have everything worked out and are ready to close except for the title issue, have your seller go to title, sell the house to you via a Warranty Deed (this is what they would be doing anyway!!!). Poof you are on title. NOW you can sell the house. The lender gets a new title report, and now you can be paid from the transaction legally. DO NOT have the seller sign title over until you are ready to close on the whole deal, it can screw up title for the SS transaction. Just be honest about it all! Lenders are only worried about this stuff if there is something fishy (red flags suggesting fraud) or if the value is not there.
No, i don’t mean putting the property in trust, nor do i mean use the end buyers funds. I mean close the first deal with cash and flip it to the end buyer. Everything is disclosed through public records so there is no misleading, nor am i cheating a buyer by selling them an over priced proeprty.
No, i don't mean putting the property in trust, nor do i mean use the end buyers funds. I mean close the first deal with cash and flip it to the end buyer. Everything is disclosed through public records so there is no misleading, nor am i cheating a buyer by selling them an over priced proeprty.
CharlottePlayer, I’ll take it that you’re not a real estate agent right? I’m trying to close a deal like this right now and could use your input…
The end buyer’s mortgage company (GMAC) sent out an appraiser last week. He asked me why the contract had a different seller than the current owner listed in the public records. I told him this would be a flip and the deed was already transferred (which it technically wasn’t, b/c it was signed improperly). He said it’s okay, and it shouldn’t be a problem to the bank as long as there’s an explanation for it. So the mortgage commitment was received yesterday, and we’re looking to close next week.
Have you had issues with the title seasoning? or
On the closing day, how do you schedule your closings… Do you have the first one at, say 8AM, then the next one at 3PM?
I was told that when you pay off the first bank, that bank needs to send a receipt of received funds before you can close the second deal. And sometimes getting this receipt takes a few hours, which can keep the 2nd deal from closing on the same day?
No i am not a real estate agent. My attorney handles the closing and i sign everything right then. your question about the receipt, i am guessing the wire transfer of funds is proof that they are paid. In my experience the shorting lenders request all of the paperwork to be submitted for review 48 hours before the close, so all they are waiting for is the money. The 48 hours is enough time for them to either agree to accept the deal or say no go.
i don’t get caught up in all the hoopla behind the scene since my job is to get paid. i know once the funds have been transferred i haven’t had a short lender to return the funds.
if they receipt is your problem just schedule the first closing first thing in the morning and have the last closing around 4pm.
that’s what I intend on doing. so the next concern becomes, what if you close the first deal at 8AM and by noon time the end buyer decides to back out? How do you lock in that 2nd closing so you can close the first deal and know 100% that the 2nd closing WILL happen. Otherwise, you’re stuck with all your cash tied up in the home!
nj,
i had the same question as you about how do you know the second will close. there is no guarantee the second will. what you have to do is get a title company that you trust.
the end buyers lender can kill the deal at the closing table, so you have to give the title company strict instructions not to fund the deal with your money until the end buyers funds has cleared. you never want your money tied up in a marginal deal. once your agents has the funds then you proceed to close the first deal and not a moment sooner or else this will be you :banghead.
Could the buyer you have lined up pay you the full amount first and then you quit claim it to them after the closing?
Good post. Everyone is chipping in on this one.
Simultaneous closings are a dying breed. Double closings are the only way to go to ethically profit in chunks. Yes you can make a commission (if licensed) and yes you can collect a consulting fee…but to close the big ones…you need to utilize double closings.
Charlotteplayer, I am on your side 100%. Why? Because I have read your posts on easyhud and I know you understand what you are talking about. Double closings are 100% legal with proper disclosure. The idea is complete transparency to all parties involved, INCLUDING, the shorting lender. My purchase and sale submitted w/ my short sale package has specific disclosures indicating my intentions to immediately resell for a profit. My P&S with the end buyer also clearly outlines the transaction. I also use a “letter of fact” to support full disclosure to the end buyers lender upon request. Because of the fact that we “over-disclose” we don’t have seasoning issues usually (unless the end buyer is FHA) and we don’t need to use a trust or an option contract!
In order for it to be a true double closing, you must fund the first transaction yourself. For those of you that are scratching your head saying “I don’t have the money to do that”…well…you don’t need it. There are plenty of companies out there offering interim financing where they loan you the money for a day in order for you to fund the first closing.
nj, the end buyers lender will typically fund the transaction the morning of (ideally). The attorney or title company handling the closing should let you know when funds have arrived and are being held in their escrow. Once funds are there, go ahead and close your side of the transaction (AB close), then close the second transaction (BC close). Sometimes lenders are late on funding which can make things a little hectic.
Find the right attorney and title company. I had to interview several before finding the right one. The right attorney/title co should handle the entire closing process so you don’t have to worry about the details.