i want to find preforclosures and transfer them to land trusts, then short sale and resell for profit, my question is what happens if the bank says no to the short sale and it doesnt pay to continue with buying the house, can you walk away, how do you explain to the seller (the bank may not give us the deal we need for it to work?) hope this makes sense.
You simply explain you don’t close all of the deals due to lenders being either unable to or unwilling to negotiate with you and the worst thing that will happen is what will happen if you cant step in and help.
And I have an exit clause in my contract which allows me to get out of the agreement.
I. INDEMNIFICATION: The borrower shall indemnify, defend and hold harmless the negotiator and/or buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the information furnished by the borrower, or (ii) those relating to the financial information, or ability or inability to pay for or continue to support the debt of which the negotiator and/or buyer is attempting to negotiate a short sale on the property by the negotiator and/or buyer, or any person in the negotiators and/or buyers firm, or the performance or exercise of any of the duties, powers or authorities granted to the negotiator and/or buyer by the borrower.
II. SHORT SALE CLAUSE: This agreement to sell is subject to approval by existing lender(s) of a Short Sale at no cost to Seller. Seller shall not be required to deposit funds to close escrow.
III. INSPECTION OF PROPERTY: Buyer shall have until the close of escrow to complete all Buyer investigations of the property, approve all disclosures, and other applicable information, which buyer receives from seller and/or persons hired to inspect property on behalf of Buyer; and approve all maters affecting the property, including but not limited to, the marketability of the property, the elevation, grade, and topography of the Property and to conduct engineering and soil boring tests as the Buyer deems necessary in order to determine the usability of the Property. Buyer may in Buyers sole and absolute discretion, give notice of termination of this Agreement at any time prior to the expiration of the inspection period, and upon such termination, all deposits held in escrow shall be returned to Buyer.
As for resell I always state in the contract that the contract is “Subject to the seller obtaining title”
If you prepare your discount proposal the way the bank wants to see it they cannot refuse your offer. The REIclub tele-conference of Dec 20 gives you all the info on how to make it work…check it out.
thanks to both of you, very informative. happy holidays!