DO I NEED TO HAVE A LAWYER DRAW UP A CONTRACT FOR MY SHORT SALE THAT INCLUDES CONTINGENCIES? or IS THERE A STANDARD CONTRACT THAT I CAN USE THAT FOCUSES ON THE INTRICACIES OF SHORT SALES?
I PLAN TO PRESENT MY SHORT SALE PACKAGE ASAP THIS WEEK & I WANT TO BE READY TO FAX OVER THE CONTRACT WITH THE SELLERS SIGNATURE.
PLANS TO FLIP WHILE IN ESCROW:
I AM IN ATLANTA, GA & I PLAN TO FLIP THIS PROPERTY WHILE IN ESCROW. I HAVE HEARD THAT YOU NEED TO SIGN YOUR NAME & ‘‘ASSIGNS’’ TO THE CONTRACT? IS THAT CORRECT – AND WILL THAT HOLD UP LEGALLY?
You shouldn’t need any special contracts. You will need to have terminology that says it’s assignable or add “And or assigns” next to your name as buyer. In the terms section of the contract you need to say that it is contingient on the bank accepting your offer for a short sale.
No need to worry about this one. If you put the “and/or assigns” or anything of the like on your contract, the lender will reject it. This is true on 99% of any lender REO deals, and 99.9999% on any shortsale deals.
The lender wants to know a) who they are actually closing with. If it’s an assignable contract, then they aren’t sure. And b) that the deal is actually going to close. They’ll know this because you’ll be required to show proof of funds/prequal letter and such. If you assign, the assignee doesn’t have to prove that he can close.
I’d just like to add that you need a proof of funds letter from a lender or your bank to be included with your package. You will need to double-close by the sound of it.
Interesting… therefore, if banks don’t accept and/or Assigns then is it still relatively used these days. Also, you mentioned double closing – isn’t that illegal in some states. I am working out this deal in GA…?
Yes, the “and/or assigns” can still be used, just not with a REO property (as well as most MLS listed).
And no, performed legally, I know of no states where a double closing is illegal. There are no laws out yet that prevent you from selling something that you actually own, however limited that ownership may be.
Of course, the rub is ‘performed legally.’ None of this “use the end buyer’s funds to pay the seller” or “close with buyer, then with seller.” Doesn’t work like that in the real world. At least, not legally.
Well… I have heard of (meaning I haven’t tried) double-closings with the end buyer using his cash or a HML. End buyer using most lending sources (banks, mortgage companies) will absolutely forbid the funding of 2 transactions. I’m sure Roger could expand on this futher. I wouldn’t recommend trying to double-close by “cutting corners”.
