Can someone explain to me why investors buy wholesale REOs? Why don’t they just take the time to put in offers themselves?
I understand why you should buy wholesale properties that are not listed, from probate, inheritance etc. But it doesn’t take that much work to submit REO offers.
Hi,
I think in part your confused, as investors we are buying REO properties from lenders for a discount of 30% or more!
In fact in California, Nevada, Arizona and Florida buying REO’s is the primary source of properties right now as the various banks and lenders sell 7 out of 10 houses!
Property is property and since REO’s are the primary and largest part of the market it makes sense to take properties that have been unsellable and on market for long periods of time and sell them over to investors at deep discounts (30% or more) to get them off there books which removes these non performing properties!
GR
A deal is a deal. That’s the answer. Why do investors buy foreclosed homes at the public auctions? Some investors are full time and do put in their own offers. Some are part time and work jobs and simply do not have to the time to make offers and work 40+ a week. If the prices you provide are on par or better then the REO listings, you will have buyers.
Can you assign a reo, or do you need to do a double close once you have it under contact?
Hi,
An REO can be assigned!
GR
Hey GR!
In what state can REO be assigned? I know you can’t in NY, NJ, PA, IL.
Thanks!
Hi,
I think your thinking about short sales which must actually close to the real name on the contract by federal law!
Contracts of any type are always assignable in all 50 states, however real estate agencies and state real estate boards rules may prohibit a realtor from participating in an assignment (So they say it’s not legal) but the actual act of assignment is legal!
If contracts were not assignable then mortgages could not be sold to other investors or lenders, the contract is never re-written between Mr. and Mrs. Homeowner and a new lender, the rights to the existing contract are assigned to a new lender in a purchase of paper assets!
Since your assignment is really an escrow situation, you should be able to enter the assignment into escrow when you introduce your new buyer and have the title / escrow agent handle the assignment!
GR
Hey GR,
Are you sure REOs can be assigned ? If my agent says they cant be assigned,what should i do?
Most REOs are unassignable. Actually I am pretty sure all are not assignable.
You can just double close. Of course you will have to pay closing costs.
Hi,
Assignments are done at the escrow / title level! As long as my contract or state board of realtors contract does not specifically have a clause saying "The contract is not assignable", then the contract can be assigned! I do not ask my real estate agent or broker, they are not attorney's, they do not practice law and they are not experts on "Juris Prudence"!
All contracts are assignable under state and federal laws (All Contracts), all contracts have to be assignable or your used car dealer could not sell your contract to a bank because your supposed to pay your dealer! Your bank could not sell your mortgage if your contract was not assignable! Your credit card company could not sell your account to a debt collector if your contract rights were not assignable!
Assignments are done in escrow or title and provided the contract does not contain language otherwise you are entitled by law!
REO (Real Estate Owned) properties are already owned by a bank or lender, it is a regular sale and provided the lender does not try to write a clause prohibiting you from selling or assigning the contract for 30, 60 or 90 days it is legal and supported by state and federal laws (All States and US Territories including the District of Columbia)!
Short Sales because of the fact that buyer is purchasing for less than is owed on the mortgage must be closed in the same name as is written on the contract and HUD1. The only way to buy a short sale and re-sell provided the lender or bank does not prohibit flips for 30, 60 or 90 days in writing you are entitled to get transactional funding and close to your end buyer!
Assignments are done by bringing your end buyer into your title or escrow company and introducing them to the closing agent and transfering your contract rights to your end buyer! Assignments have nothing to do with your agent or broker!
If a contract has a “Clause” and you cross it out and write your name “Gold River and / or Assigns” and the seller approves it by signing the contract, then your contract is now “Assignable” regardless of what the contract say’s!!
Keep it simple, don’t volunteer information not required to successfully close your deal, and do not take “No” for an answer until proved otherwise!
GR
I agree with GR completely… First, agents/brokers hardly know anything. Most of them are just looking for a hassle free way to make their commission. And contract law does specify that comments/notes that are hand written will supersede that which is typed, but getting them to sign after you’ve marked up their terms is another story.
I dont know very much about wholesaling, but even in the event that you couldn’t assign the title, couldnt you just put the title in a trust, then assign the trust?