Short Sales Done Right!
Yesterday I received a note from one of my Realtor friends who attended a meeting.
She noted:
“I went to a class today put on by the Minnesota Realtor Association on Short Sales. They had a representative from the FBI and IRS there. They said short sale flips are illegal and they are starting to prosecute. I asked if it is illegal if there is full disclosure to all parties and they said it is.”
But there is one detail that was overlooked.
Just because an Investor is involved doesn’t make it a FLIP.
Yes indeed, I buy and sell short sale properties. I place a contract on the property with the homeowner. With the homeowner’s approval, I negotiate with the banks. I tell the banks that I’m an Investor and fully intend to buy the property and sell it for a profit. I also close the first sale transaction with CASH. If I were to skip any of these points (FULL DISCLOSURE and CASH), I would be in serious danger of doing an illegal transaction.
There are times that a short sale can be done without a second closing. When I sell the property to a CASH buyer, there is often no need for a second closing. I just need to FULLY DISCLOSE that the buyer’s CASH is being used to close my transaction – and they need to agree that this is OKAY.
If you’re working with an Investor, make certain that they are FULLY DISCLOSING the details of the transaction. Also, be CERTAIN that the stipulations of your title company and the banks involved DO NOT prohibit anything you are doing. If the bank specifically says you must hold the property for 90 days before you can sell it:
- The Investor might be able to negotiate that requirement out of the closing documents.
- The Investor might need to purchase the property and hold it for 90 days to fulfill the requirement.
- If the buyer’s bank is the one making this requirement, then the buyer might have to switch to a different bank.
FHA is one of the most difficult to work with when an Investor is involved. Either the buyer will need to not use FHA, or the Investor might need to step out of the way to get the transaction closed.
If the terms of the deal are being followed and the transaction is closed with CASH, there is no problem with buying and selling short sale properties in ANY of the United States.
I buy houses that are becoming a burden and payments are hard. Tell your friend to contact me. I talk to banks and buy with CASH. I FULLY DISCLOSE to the banks that I am an Investor and FULLY intend to buy the property and resell it for a profit. I make CERTAIN that the details of the closing are done correctly.
Call me: 507-319-5788 www.PropertyProblemSolver.com
