NEW Buyer/Investor Disclosures from Lenders!!!

More and more lending institutions are now requiring the Buyer to sign off at closing that they will be the owner-occupant of the home being purchased and that they have not obtained the deed to the property within the past 6-12 months. This is shutting out investors trying to flip these properties, which means that more and more lending institutions will want you, the real estate agent, to facilitate the Short Sale transaction and find a regular Buyer for the property. If the only legitimate way to make a profit in a Short Sale is to document and disclose what the real estate agents are making on the HUD-1 statement, these new disclosures at closing will eventually put a halt to the way investors are closing and profiting from Short Sales, and will leave HUGE opportunities for many, many real estate agents to build a commission-generating machine! If the only way to legitimately profit from a Short Sale transaction is earning commissions that banks are willing to pay and are disclosed on the HUD-1 statement, then how can someone truly profit if they’re not a licensed real estate agent? The moment someone profits without a license, this usually indicates that their has been a “wholesale” or “flip” involved and monies have exchanged hands that the lenders aren’t aware of. Flipping or wholeselling is fine, however, when it’s being done at the expense of the Seller (i.e. receiving a 1099C for difference owed), then it’s not a true win-win for all parties. The banks are seeing this and they’re putting a stop to it. This will leave huge opportunities for agents! Comments anyone?

We have successfully shifted our short sale business to using an option agreement to purchase the property. If we are unable to buy the property at an “Investor” price for cash we have a realtor market it at or just below BPO price and use the option along with recorded Memorandum of Option to do a fully funded simultaneous close. This method has worked well and banks seem to accept it.

I know that America’s Home Rescue (AHR) does a good job in what they do. From what I understand, AHR’s main business is for RE Agents to list & sell short-sale approved properties. What AHR has said, if true, is a great opportunity for them.

AHR: Given the tightening of lending guidelines, how successful have banks been in getting Short Sales sold as you have stated?

I would tend to think that a lender’s inventory of foreclosed homes would increase substantially if they require owner/occupants.

That sounds like a good technique, but how do you get paid if you don’t buy it at “investor” price??