Ok So I found this on another short sale website. They have some good information…Well as I was looking around I found this…
A nominee instruction allows another person or entity of your choice to legally take your place in a transaction. When and why would this be important?
Let’s say you have negotiated a short sale and you have obtained WRITTEN acceptance from the lender for the negotiated short sale price. Let’s also assume that you have negotiated up until this point in your name which is also the name on the purchase and sale agreement.
If you are like many astute investors you keep assets out of your name and you may want to close this purchase using a land trust or an LLC. But you realize if you would have started the negotiations with the buyer as a land trust or LLC it could have complicated manners and you may not have been able to successfully negotiate the short sale unless it was in your name giving it a ‘normal’ appearance.
But now you are ready to close. All you have to do is use a nominee instruction to the title company, and your new nominated entity completes the transaction. EVerybody wins.
Has anyone here are heard of or used this tactic??
I guess the answer would be a question. Did they mean a nominee or a nominee trust?
Your best source of information for your question is probably Black’s Law Dictionary since you are in the legal realm. A nominee is generally limited to politics as in this year’s nominee for the presidency for the republicrat party will be Samson Windbag. Or it could be in the securities world of stocks and bonds.
A nominee trust is generally limited to real estate. I don’t see why it couldn’t work but I’d bet if the escrow officer has never seen it and their legal dept feels the least bit queasy, they won’t do it.
I’d also research local jurisdictional casess to see if any stare decisis exists in this realm. The last thing you want to be accused of is setting up a straw man to defraud the lender or homeowner or both.
all they talked about was nominee instructions and left it at that. I have been looking on the web for more of an answer but have not turned up anything. :banghead I will keep looking because it seams like a way around a double close or assignment.
I have recently written five purchase offers for bank REO property with “Dave T and/or nominee” as the buyer.
My intent here was to preserve the option at the settlement table of taking title in my own name, or in the name of a trust that I might create prior to settlement, or in the name of an LLC that I might form prior to settlement.
I have yet to have one of these offers accepted probably because I am only offering 50% of FMV or less. In only one instance did I have any objection. It was relayed to me through the listing agent that the lender did not permit assignments and wanted me to rewrite my offer. Obviously, the other party did not know the difference between “and/or assigns” and “and/or nominee”.
DaveT why write in or nomonee? At least in california a buyer can assign contract unless expressed otherwise… It is defaulted to that ability… I dont use the term in the “Buyer” line however I do have the assignment clause as one the many paragrophs inside my contract although not required.
Just curious why investors actually use the term
These were REO properties and the banks have a non-assignment rule.
And unless specifically stated that you can not assign you can therefore why bring the idea up by stating it?
So my LLC or trust can take title directly from the bank at the settlement table. Otherwise, I have to take title in my own name first then transfer title outside of settlement. Just trying to personally stay out of the chain of title.
thanks for all the good information (Dave T and Michael)…I am now going to insert and/or nominee into my contract…So I don’t actual have to have a written document stating a nominee…I guess I am think of this on the same lines of a trustee…Thanks again for all your information.