Posted by JoeS on August 04, 2004 at 06:07:49:
In NY State either a Title Company or attorney can do closings. I always use a Title Company, but a regular seller or a bank reo dept. ALWAYS uses an attorney.
Getting Around Nonassignability Clauses - Posted by John Katitus
Posted by John Katitus on August 03, 2004 at 24:57:46:
I have been trying to figure out how to buy REO’s to wholesale. Banks that I have worked with so far have allowed me to assign the contracts, but I don’t expect that to be common. Also, they try to require you to use their designated Title Company, making it next to impossible to do a simultaneous close.
What if I purchased the property in the name of “123 Smith Road Land Trust, John Katitus, Trustee” and created the Trust before closing with my buyer as Beneficial Interest? The problem I see is getting the buyer to accept the scheme. Can anybody come up with a better way? Steve Cook suggests forming an LLC and selling it to the buyer, but again, that’s cumbersome.
I think in my next round of offers, I will wait until they accept and if they try to invoke nonassignability I will tell them I need to assign or pick the Title Company or no deal. Has anyone tried this and what’s the success rate? Any feeling on whether the banks even care? Thanks.
Re: Getting Around Nonassignability Clauses - Posted by JoeS
Posted by JoeS on August 03, 2004 at 07:43:17:
If the seller will not accept an offer on MY contract (assignable) then I will use an MLS contract, and I write the offer in my Corporation name. About 3 days before we close I call the lender’s attorney and tell them I need to make a minor change in the way the Deed will read (insert your wholesale buyer’s name). This usually is met with “we will have to charge you another $50 to re-type everything” after which I tell them “no problem, just do it”. If the attorney doesn’t have an issue with what you are doing they are not going to call someone behind a desk at the seller advising them to kill the deal! Remember…all the seller really wants to do is sell the property!
I have done this literally dozens of times, many times with the same seller! But…if you tell the seller at the outset you are going to assign the contract they will get all jumpy that you are not for real and have no intention of really buying the property. Building credibility is the key. Hope this helps.
Re: Getting Around Nonassignability Clauses - Posted by G(Atlanta)
Posted by G(Atlanta) on August 03, 2004 at 11:53:54:
Whose “lender attorney” would you contact to do something like this? If you are planning to assign the contract you would not necessarily have a lender of your own. On the other hand, how could you contact your end buyer’s lender’s attorney if you are going to ultimately be the seller in the final transaction. I’m not challenging what you are saying. (As I am faced with the unassignability issue) I’m just trying to understand how would you go about doing what you are saying. Please clarify.
Thanks,
G(Atlanta)
Re: Getting Around Nonassignability Clauses - Posted by JoeS
Posted by JoeS on August 03, 2004 at 13:29:49:
I apologize for any confusion…I should have said to contact the SELLER" attorney just befor closing to change the wording on the Deed. Sorry! Hope this helps, ask more if still uncertain.
Still just a tad bit confused… - Posted by G(Atlanta)
Posted by G(Atlanta) on August 03, 2004 at 18:59:56:
Just out of curiosity, suppose the seller does not have an attorney and of course they wouldn’t have a “lender” attorney, because they are “selling” of course. I’m still a little bit confused about who I should contact.
I hope I’m making sense of these questions.
Thanks,
G(Atlanta)
Re: Still just a tad bit confused… - Posted by rm
Posted by rm on August 03, 2004 at 20:31:40:
Sounds like in Joe’s market, atty’s conduct the closing.
Perhaps in your market this is handled by a title or escrow company.
Re: Still just a tad bit confused… - Posted by JoeS
Posted by JoeS on August 03, 2004 at 20:15:25:
The seller will have an attorney, 99% of ther time. This is whom you need to contact about the Deed that will be signed over to you or your assigned buyer.