Hi everyone,
I am working on a short sale that I will wholesale once approved. I understand that banks don’t allow assignments, therefore I will sell to my investor/buyer through simultaneous close. With an assignment, I take my fee (or non-refundable deposit) when my investor/buyer and I sign the assignment contract. With a simultaneous close, I would want to collect a deposit to insure that my buyer is sincere and won’t flake out on me at the last minute. Since I won’t be using an assignment contract, how do I contract with my investor/buyer when they purchase from me?
Waaaait…maybe I just answered my own question. Do I just write up a new contract (standard state contract) with my investor/buyer and put my fee in the new contract as an option fee…or something like that? :banghead
Thanks in advance!!
When I do a double closing (or simultaneous) , I write up 2 separate purchase and sale agreements. One with the seller and one with the buyer. As a matter of fact, I do it this way all the time, even with assignments. My closing attorney accepts my contract with the buyer as an assignment (What we call the “back end” contract).
When I send the title work to them, I let them know if we’re doing an assignment fee or a double closing.
I hear that the banks are getting very strict (and so are title companies) with double closings and short sales. We were turned away from 3 title companies on one deal because it was a short sale. We actually had to fund the deal with our own cash before they would close it.
Shortly after that, the title company emailed me some new guidelines from the underwriters stating that short sales could not be “double closed”. They had to be funded on the front end with cash.