I have had some problems at times with homeowners who say that they want to do a short sale but then back out after a bit. Of course this is completely their choice and if they want to do that it’s fine. It’s just kind of a pain because I end up doing work I didn’t need to. I’ve heard that one good way to make sure they really are motivated to do the short sale is to get them to sign a power of attorney form, giving me the power of attorney. Is that a good thing to do? Also something I haven’t done immediately is get the deed. I’ve also that is a good idea to have them give that to you. So I guess my main question is is doing this two things a good idea? and is that what others are doing currently to make sure the homeowners are really committed to going through with this?
Shortsales really puts you in a big problem if the borrower cannot pay the mortgage loan so, it is important for homeowners to get motivated as, it somewhere turns them down.
Never done this personally, but my guess is that you’re gonna scare most people off as soon as you mention having them sign a POA. You’d also have to have a lawyer draft up a specific Limited Power of Attorney regarding the particulars, so figure some costs to get that set up.
Besides, most people don’t really understand REI anyway, so i’m pretty sure they’d automatically assume you were trying to screw them. I get pretty leery myself when I hear anyone mention POA, and I consider myself a pretty savvy individual!
There are four documents you should get in a short sale and for that matter any purchase…
POA (Make certain that your Country Recorder Office will honor it once it is recorded. To do this take it to your title company for verification. Heck I had a Superior Court Judge sign a POA on a purchase… He understood the reasoning behind…
Grant Deed… I like taking it blank. (Just dont give anyone a copy of the darn thing a blank deed is voidable) Meaning that the grantees name is not on the document. You can write it in later. More then once has the buyer changed from myself, my company or my trust and a blank grant deed makes not having to get another one in case you change buyers. Just dont forget where you put it…
Memorandum of contract… This is the document that protects your right to buy in the case the seller goes sideways and you dont want to record the grant deed. BTW to release this you would use a quick claim deed.
Assignment of Beneficial Interest of Insurance Proceeds… From time to time you’ll find that a property has a unreported insurance claim on it… Typically an insurance claim can be reported up to a year later and doesnt matter if the property has changed hands…This document gives you the right to the money… The last one I did gave me 12,300.00
As for if you’re looked at weirdly when you ask for these documents or not… Bottom line is NO… The only one who thinks its wrong is you… The seller wants to sell… Thats all they know… And when they know that you have all of your ducks in a row they are less likely to pull a bret farve…
Thanks a ton michael! That’s exactly what I needed. Now the Assignment of Beneficial Interest of Insurance Proceeds only needs to be used if I entend to hold onto the house right? If I’m planning on flipping the house I don’t see a need to have it. But I could deffinently be wrong…
You don’t need it until you need it… Imagine trying to get a Pre-Nup during your divorce.