Her husband, about a year ago, was charged with embezzlement from his employer, that, among other things is what started her whole ordeal.
They have since gotten a divorce, she ended up with the house and he is in prison.(have to check to see if he is still on the deed, may be a small problem I did not think of until now!)
Anyway, this is a small town, she wants to get on with her life. She doesn’t even want her name involved in any public manner, Her husbands old boss lives around the corner, she’s freaking out thinking that other people thinks she has some of the embezzeled money!
Kind of a mess for her! But I think that is why she hasn’t listed the house. Does not want a FOR SALE sign in her front yard.(poses a marketing challange for me)
I think she would be delighted with the fact she wouldn’t need to go to closing.
Posted by Bob K (mi) on April 15, 2006 at 22:14:36:
I have a house under contract for 135K (the redemtion amount)will give owner 5k to move on with. I’ll be selling to a retail buyer or end user.
If we do a simultanious closing there may be seasoning issues with my buyers lender. I ran into that problem earlier this year on a rehab that I did. Needless to say I don’t have a cash buyer.
If I assign the purchase agreement I’m concerned that a not so savy buyer may shy away from,or be leary of the whole deal.
This would be my 1st assignment,can everything be handled by my atty. at closing?(won’t talk to him til mon.)
Should I just collect my assignment fee and step out of the way?
Is it your experience that buyers are o.k. with paying 5k to 10k for contract before they go to the closing table?
Or do I have it all wrong?
I’ll be very grateful for any input you seasoned investors have.
Have you considered a simple land trust? - Posted by Innovator
Posted by Innovator on April 16, 2006 at 23:06:39:
Have you considered a simple land trust?
There is only one seller (trust), one buyer (credit investor/partner), one sale, and one appraisal. There is no double contracting, no simultaneous closing, no assigning your contract, no acquiring or selling of an option, no private or hard money, no loan fraud (everything is fully disclosed because of the trust), and your down payment and improvement costs, if any, comes back to you at closing! It?s safe, ethical and legal in all 50 States.
Your seller transfers property into trust with third party trustee (who has the responsibility to protect all the parties). Your seller becomes beneficiary in trust with his contribution being the agreed upon price. You become the investor beneficiary with your contribution being your profit in the deal. At closing the escrow officer (title co) pays the beneficiaries their contributions and the simple trust is then terminated.
Re: Assign or double close ? - Posted by Kristine-CA
Posted by Kristine-CA on April 16, 2006 at 20:49:34:
My experience has been that doing an assignment will not help you
here. Lenders want to see the name of the buyer and the seller on the
contracts. And you are correct in assuming that your average retail
buyer may be confused by a contract with a different purchase price
and giving you any $$ for the contract. In that price range your buyer
will need to use their lender funds to pay you, so it is unlikely that your
buyer will pay you cash up front.
If it were me, I’d continue with a double close, making sure I had a
broker that could do the deal for my buyers. There are plenty of loans
out there that don’t have seasoning issues.
What are the numbers on this deal?
Is this $135k well under market value?
Assignment fees and the retail market rarely mix.
A retail buyer rarely has the cash to pay you upfront for your assignment fee. Even if they do, their agent will rarely push this deal to them, UNLESS its a great deal so. Most agents dont get it.
Now this is just my experience. RARELY have I ever gotten a retail buyer to pay me outside of a closing for an assignment fee.
I have gotten investors with cash to pay me cash for an assignment of right to purchase. But, I’ve negotiated a very low price and am still selling low enough for them to pay me and they’ll make a nice profit.
What I’d do:
Get the seller to DEED the property to you. Not all lenders will have a problem with this. Pay the seller what he wants after you close. This will require you to get the seller completely under your control. If they wont do that, there are other deals.
I have not considered a simple land trust, I’m a beginner, Have 3 sfh as rentals and one 4 unit apt. building. looking to build my cash reserves, I know I started backwards, but has worked so far.
Am taking everyone’s advice on this site to build cash up before I get into trouble with some unforeseen circumstance that’s probably inevitable!
I am eager to learn different techniques of acquiring property. I have read alot about land trusts on this and other sites, havn’t taken the time to study it.
Sounds like you and lukeNC are on the same page with this one. Thanks for responding.
I work pretty close with a couple different mtg. brokers…Your saying, I think, to steer the potential buyer to someone that I think may be a little flexible?
The redemtion amount was 130,891.00 march 9th going up 23.99 ea. day…so now it’s 131,780.
I used 135k as a round number to give myself alittle room for time and closing costs.
the deal is real thin, FMV is about 160K.
I was working a short sale, she called too late and although the loss mit. agent said it was a great s.s. package, the investors didn’t want to adjourn the auction. Worked with HomsEq on that one.
Just got it too late or investors thought it was worth the gamble to take it back.
So I knew the lady just wanted out ,so I went back to her after the sale and signed it up for amount of redemtion plus moving/restart money.
She doesn’t care how long it takes really(6 mo redemtion period) she’s just stashing money till she has to go.
She’ll deed the property to me 'cause she just don’t care.
If I make 5k that’s great, I really have nothing to lose except a couple hundred for advertising.
I agree with you on the assignment thing, I think it would be a problem.
Re: Assign or double close ? - Posted by Kristine-CA
Posted by Kristine-CA on April 16, 2006 at 22:00:25:
I’m not saying “steer” – I’m saying control the deal. Ideally you would
make the contract with the buyer contingent upon using your
mortgage broker.
I’d also make sure you have a plan b (backup buyer or funds to close).
What will you do if your buyer can’t get a loan for other reasons
besides the title issue?