Can anyone give some exit stratagies for ss deals. I have heard that you cannot assign the contract to another investor, so how would you sell this house at closing.
I sell the property directly to an investor from the HO. I pay off the bank for the SS amount negotiated in that transaction.
What’s your plan? Are you rehabbing it or just selling straight to an investor?
How do you sell the property to an investor “directly from the HO”? thanks
You need to already have your investor lined up before you go to closing. If your name is on the SS approval letter you should call the lender and have them approve the SS in the name of the investor that you have found to assign the contract to. If you have been told by your loss mitigator that your SS has been approved but they have not yet sent you the approval just tell them to put your investors name on the approval instead of yours.
How do you ensure payment from the investor, especially an investor you’ve never worked with? You couldnt use a standard assignment contract could you?
You have them sign an assignment of contract addendum assigning your contract to them. The addendum explains that you, as the buyer on the contract, are assigning your rights as the buyer to the investor and for what fee.
A good example of an Assignment of Contract Addendum can be found at www.yamon.net, atleast for Florida. Click RESOURCES and then on the left click CONTRACTS and FORMS.
Thanks, That looks great
I have another post entitled: Steps For Short Sales, maybe you could give it a once over and give me sort of a push in the right direction?
Thanks in advance
What does HO mean? Thanks.
Hollyberries
Holly,
In this case, it means “Home Owner”…(or maybe a long-handled gardening implement – LOL)…
Keith
;D I still don’t understand that if I put the investor’s name on the ss papers, how will i be able to collect my fee legally if i;m not on the paperwork.
You are on the paperwork. Your on the contract as the buyer, you add the addendum to the contract stating that you are assigning your rights as the buyer over to another investor for a fee and state that fee in the addendum, the addendum goes over to the title company and they add your fee to the HUD-1 on the side that explains what the buyer is to pay at closing, at closing you will recieve a check for your fee, that simple.
I’m confused because i was told on a ss the lender would not let you assign the contract so again how would you be able to flip to the other investor if you cannot assign the contract. Sorry but I"m just really confused about this. ???
I have assigned a contract to another investor after negotiating a SS; so from 1st hand experience I’m telling you that the information that you have is wrong.
The only thing that you need to do is, AFTER the short sale offer is accepted, BEFORE they send you the approval notice, let them know who’s name to put on the approval. If you recieve the approval and your name is on it, let them know that you are assigning the contract and that the approval needs to be in your investors name, but already have your investor in place so that you can simply give them the name and have them send it right back to you via FAX.
thanx for all the info. this really clears things up for me. thanx again for the valuable information.
It is possible to assign a short sale - BUT - you need to make sure that the assignment fee is not shown on the HUD. In most cases the lender has to approve the final HUD so if it shows up with an assignment fee of $3,000 - $15,000 I would bet that they flag it and reverse the short sale.
A way around this is a double closing or using an assignment, but having your buyer pay you outside of the closing so that it doesn’t show on the HUD.
Stefanie
My assignment fees are shown on the HUD and they haven’t reversed the SS’s but just to be on the safe side I may employ that tactic in the future. Thanks.