Short Sale Approved. What Now?

Foreclosures, Short Sales, Tax Foreclosures
1

I have a $208K short sale approval coming this week on a $260K house in very good condition located in DC. I do not have the deed nor do I have it in a land trust, but the owner will do it if need be. I just simply submitted a contract with my LLC as the buyer & a short sale package to the lender and processed the short sale.

Question is this: When I find an end buyer how exactly do I get out of this thing and get paid? I’m thinking I double-close using “transactional funding” for the first transaction, then traditional financing to the end buyer, but will the new lender underwrite a file with me (or my LLC) as the “seller” when I’m not even showing up on title at all, nor will I have a recorded deed in my LLC’s name?

The gurus seem to swear by putting the deed in a land contract with the owner as the beneficial interest, along with an UNRECORDED Assignment of Beneficial Interest in my file cabinet at home that assigns the interest to my LLC. That makes sense, but I totally don’t understand how, where, or when I get paid using that strategy.

Long story short, I got the short sale done but what do I do when I find an end buyer?

2

Would the new lender and short sale lender be OK if I assign my agreement for a fee?

3

as i understand it you cannot assign short sales.

there might be around it if a trust was used…i could have sworn i read that on the forums but don’t take that for granted

4

Thanks for the feedback. I emailed a transactional funding company today and the guy told me to simply tell the loan officer that I’m an investor and I will be buying the property and selling it for a profit. He said I should ask them if they have any seasoning requirements and just go from there.

So it looks to me that the exit strategy is use transactional funding. The key is finding a loan officer that is okay with this and get them on board.

5

What are you guys’ thoughts on drawing up the purchase agreement between the end buyer and the seller, and getting paid a fee on the HUD?

What do you call this fee?

How much can I charge without triggering the bank asking me a bunch of questions? $260K deal.

OR would it be advisable to place some type of lien on the title?

Feedback much appreciated.

6

there’s two transactions involved.

one between you and the seller and one between you and the buyer . A-B B-C

the way you want to structure it sounds like 1 HUD. i wonder if you could get away with putting a fee on there. i don’t think you could put a huge amount as your fee…if this is possible.

7

–removed wrong thread

8

Hey Ryanpal. The two-transaction closing is precisely what I am trying to avoid if at all possible. I am aware of the A-B B-C double closing scenario, but the challenge is finding a lender in this economic climate that makes loans in DC with no title seasoning requirement.

If it’s possible, I’d rather set up the closing directly between buyer and seller, and find a way to get paid my fee at closing, (or even beforehand by assigning the contract if possible). I’m strongly considering recording an affidavit at the courthouse to protect my interest, and maybe even make my fee by charging to release it ( sort of like a lien on title).

The good news is the seller is highly motivated and will do pretty much whatever is required to get the house sold. And the short sale is almost finished, should have it early next week.

9

Nope – didn’t even think of doing this until the last few days. I just submitted a normal purchase and sale agreement and preliminary HUD to the bank to process the short sale. Haven’t got to the point of getting a final HUD yet.

10

please disregard that. it was meant for another thread in which i have to post too.

good luck in finding a way to collect a fee w/out having to do an A-B B-C transaction. watch out however for trying to put a lien on the home. this sounds like it could hurt the homeowner or definitely falls under the “grey” area of being ethical.