Please help! I have my first meeting with homeowners on Friday, and I am getting my paperwork together. I have an authorization to release form, but I don’t know what kind of contract agreement to use. I just want to tie it up so while I negotiate a SS with the lender, don’t want them to continue to work with other investors once I start the SS. Is there a simple contract to use for agreement with me and the seller that lets me out if the SS doesn’t go thru or can’t find end buyer? I will use the state board contract when working with the bank, but I thought there might be something less intimidating to use with the homeowner. Also, I am an investor, NOT a R.E. agent. Thanks in advance for anyone’s help on this. This will be my first SS. :rolleyes
Regardless of whether or not the homeowner is under contract they will quite probably keep looking for the bigger better deal. Homeowners under threat of foreclosure are EXTREMELY stressed and looking for anything/anyone who can help. A contract is only of value if (a) the homeowner is going to respect it (they won’t), (b) have money to pay if you sue them and they lose (they won’t), and (c) you are willing to go through the hassle of suing. Are you?
I’ve even heard of homeowners who tried to go around investors after they had signed over the deed!!
We’re I you I would try to get the deed. If not, just negotiate, find a buyer, and get in escrow asap before someone comes along and jerks the rug out from under you.
Wheelema is correct as usual. No contract or even deed will compel a homeowner to stick with you. For this type of transaction you do not want to go to court at all costs. You will be vilified and it is just not worth the time and $$$.
I feel that your strongest ally in this business is your ability to convey honesty and comfort to the extremely stressed homeowner. If I were in their shoes I sure would shop around , would’nt you? Communicate frequently with the homeowner just to let them know whats going on.
When I go to the homes of some of the people I have massed mailed to, they can show me about 30+ letters from bankruptcy lawyers and people such as myself. I too would wonder who to trust. People have told me that they liked my delivery and then voice, so they go with me.
Most important, be honest. If the place is worth 500k and the most you can raise is 200k then do not string them along until a week before the auction hoping for a miracle.
You can also record a memorandum of agreement at the courthouse if you feel you have a real good deal and feel that the HO may try to go around you. It will cloud the title and let the other investor know someone got there before them… Just a thought
Thanks for the advice guys! I since have met with HO last Sat., and they signed authorization for release, gave me loan numbers, etc. but not yet hardship letter or W2’s, we agreed to get that to me via fax on Mon. Since then they have gone MIA! I know they travel alot for work, they are professional people with good jobs, just got in over their heads. This is a high end house, worth about $650-700K, but nobody’s buying these high end homes, plus they are out in a rather rural area. I am going to mail them a copy of their contract since I don;t have a fax number, but what did you mean by
How do I record the contract?
Thanks! :banghead
Simply go to the county recorders office at the courthouse and get this on the books as public record.