anybody else experience this?
HSBC closed the file on a short sale since there was an option contract. the negotiator said they didn’t want to accept an offer knowing the buyer can resell for more money w/out having ownership.
this is a first for me. has this happened to anyone else?
any recommendations on how to remedy this?
First question I would have is who was doing the Negotiation’s? (Just wondering about this)
Second.
There are more and more lenders that do this now. Its kinda like Lease options in the late 90’s they worked AWESOME for awhile. Then bam now people are not wanting to sign one because they either got screwed or know someone that did get screwed… Well now the lenders are opening there eyes and saying Wait we are getting hosed… There is a buyer out there willing to pay them more. Think about it like this If you had a Car for sale that you wanted $10k for and I said I will buy it for 7K and you knew that I had a buyer around the corner that was going to pay me 11k for it. Would you do that deal? Probably not.
The problem here is not that the Option Contract dosen’t work! Its just outdated and only worked a few years maybe even a few months ago. Lenders are getting tired of seeing them.
Buy the note! No title seasoning YOUR IN YOUR OUT AND YOUR DONE!
hi summit,
in answers to your questions.
i was doing the negotiationg. they never said “oh so you’re the buyer?”, so i dont see that being an issue.
i can see that banks are catching on to the option contracts, but the funny thing is, many other lenders i’m working with have not balked at this.
in response to buying the note, i’m very interested in this. i posted a few questions that i’m still searching for answers for in your thread: http://www.reiclub.com/forums/index.php/topic,45689.0.html
This just happened to me with Wells. They said they were closing the file b/c of the option contract. I just sent them a standard contract and guess what? 2 days later I got a call that the bpo was going out and the file is open and moving forward. What’s wrong with a standard contract? I just put $10.00 for a deposit. If things go really wrong I can just walk and be out $10. JMO
We stop using the option contract about three months ago for the reasons stated above, the banks just don’t like them anymore, we use a standard board of Realtors contract for our State with a lot of addendums thrown in. So far so good, the addendums basically give us the same get out clauses as an option contract.
I also just had Suntrust in 2nd position require a change from the Option Contract to standard state contracts. Not that many are rejecting them, but there does appear to be a leaning that direction. The Option Contract is great for transparency and disclosures to protect you as an investor. Just go to the state contract and make sure to use all of your disclosures that are in the Option Contract. I would still use the Owner Affadavit that goes with the Option Contract. :banghead
When you say that you should just use a “standard state agreement” what exactly is that? Just a typical purchase agreement that a realtor would use??
Yes, just your local realtor board or state approved real estate contracts used by realtors. Get a copy that you can load to your computer, or scan into a word document. Take the disclosures from the Option Contract and put them into an Addendum to this standard realtor contract. Another option is to connect with a realtor who will do docs for you with the short sale disclosures added in an Addendum. You want to be clear with the realtor exactly what you are doing to make sure you get any supplements or addendums your state or local boards may use. For instance a distressed property facing possible foreclosure in Colorado has a seperate contract that must be used with the homeowner. Hope this helps - hard to be real specific because all states have their own contracts drafted by the state Real Estate Commission.
Hmm… is there a place to get those online? I’d love to add them into my site :evil