I am having such a hard time w/short sales. I had the h/o quit claim the deed to my Co. (Blue Stone Real Estate) and now that we want to close, the title co is having a hard time that the real buyer is no longer me and that I’m “assigning” the contract. Basically, title wants me to contact my negotiator at the bank and have her amend the SS agreement so that it says the new buyers name instead of my LLC’s name. How am I suppose to get paid if I’m thwarted out? Ultimately, the deal is between the end-buyer and the H/O. But i negotiated the whole thing! So friggin’ frustrated and i deserve to get paid as i have been working on this since may of last year! :banghead
Initially, Blue Stone Real Estate (me) enters into a contract to buy prop from H/O. I negotiate w/the bank and bank agrees to short the property and I get SS agreement from the bank. I put it on the market and found an end-buyer right away. So now comes closing and flags go up. wth? I did write the “and/or assigns” right after Blue Stone Real Estate on the buyers blank it makes it an “assignable” contract. But now that I’m assigning the contract to the end-buyer and wanting to close they’re putting a hold. Crap.
The lender agreed to a short-sale and they approved it as it was written even with the “and/or assigns” from the get go. I mean why can’t I just assign the contract to the end-buyer and he close w/the lender? I hope I make any sense at all. Any ideas?
My guess would be that the short sale approval letter has written within the terms and conditions either a "No Assignment Clause" or a "No Sale Within 90 Days" clause.
I am guessing that your title company is seeing this on the documents that were sent to them by the lender.
If it is as simple as a “No Assignment Clause” you can probable get a flash funding company, close in your name and then close right away to your end buyer.
If your short sale approval has a “No Sale Within 90 Days” clause of course the only way to do it is buy it in your name and re-sell in 90 days.
If your buyer is using an FHA loan that would put the stop on this as you have to have 90 day seasoning from your closing to sell to an FHA buyer.
I think the problem lies with the fact that you had them quit claim the house into your companies name. What you should have done is used had the ho put the property into a land trust. You would have been able to use a transactional lender to close the first and you could go into next room to sell to end buyer.
Wrong title company or wrong settlement agent. No way should you allow the Title Company to control who is buying the Property from your H/O. You are correct that you are the procuring cause of this transaction being put together, and you deserve to be paid for your time, effort, and expertise. What you need to do is close on the first transaction, then find another Title Company, and maybe even a different Lender for your “C” buyer if that Lender has some problem with you earning your money as a SS specialist.
What if you were the builder of a new house? Would you just step out of the deal and let the bank, sub-contractors and materials suppliers collect their money and cut you out? Hell no.
How about an attorney would represents a client in a worker’s compensation suit, then wants to collect 1/3 of the award before the client gets their 2/3rd’s? You need to fire the Title Company and find one who understands who they are working for. Of course, if you don’t have the Chutzpah to retire the payoff, you’ll have to do what MichaelQuarles recommends – a double close. If you can’t find a settlement agent to work with you on those terms, then you may have to close once, and then a few hours later, close again.
But if there are seasoning issues, then you’ll have a long wait, but if there is enough $ in the deal, the wait may seem worth it. But no way should set out of the transaction without being compensated, IMO. You put the whole deal together and without you, no one makes a nickel!!! Not the bank, not the title company, not the Realtor – you put it together and if ANYONE gets paid, it’s YOU!
Maybe you could sell your LLC to your end buyer. That way, you can get paid for it, he can pay for the deal, the money would be paid from him, through your name, and the deal would close. That almost sounds simple to me. All you would need to do is transfer the llc to the end buyer’s name, and you should be good (after you get the money from the buyer).
Closing short sales can be very exhaustive and straining on your nerves, as it needs not only financial decisions, but also has a great deal of embarrassment and emotional issues attached to it.