How should I deal with the bank addendum issue while negotiating with the bank - Posted by Tarun_md

Posted by SCook85 on April 15, 1999 at 21:49:59:

In Maryland Doc Stamps and transfer costs on a $100k home are $2500 alone. It is customary for the buyer and seller to split these but that is not always the case. Then you still have to pay for other closing costs, so it is a significant figure here.

How should I deal with the bank addendum issue while negotiating with the bank - Posted by Tarun_md

Posted by Tarun_md on April 14, 1999 at 22:43:53:

A little over a month ago I started making many offers on listed properties for wholesaling(flipping) purposes. All of these offers were through a letter of intent. However, one seller(bank) wouldn’t even look at a letter of intent. So I decided to write the offer on a contract and have my agent fax it to the listing agent. The bank(nationsBanc mortgage corporation) wants me to sign its 2 page addendum also. However, there are two provisions on the addendum in particular that I don’t like.

  1. The Bank wants to use its own title company.
    I have a problem with this because, what if the bank’s title company is not aware of double closings or simultaneous closings. I prefer to use my own title company.

  2. This contract is not assignable.
    The only problem I have with this is that it will cost me about $1500 more to double close as compared to simply assigning the contract which will make the deal less marketable if I was to flip to another wholesaler because I would have to sell it to him for about $1500 more than what I would have if I were to simply assign the contract.

I have learnt from courses that it is not wise put too many of your own provisions when dealing with bank reo’s.

Should I simply just write on the addendum that a title company of buyer’s choice will be used and not the bank’s.

Also, should I cross the Non assignment clause.

I just don’t want to look like an unprofessional, especially when dealing with a bank. Any opinions would greatly be appreciated.


Re: How should I deal with the bank addendum issue while negotiating with the bank - Posted by SCook85

Posted by SCook85 on April 15, 1999 at 21:54:37:

You need to remember who is making the offer. I dont’ think twice to cross out the clauses that I don’t like. I’ve bought 2 properties from Nations Bank so far and I assigned one of them. When it comes down to it they all just want the deal done. I have assigned contracts where I did not cross the clause out. In the eleventh hour when settlement is right around the corner and they want that house sold you would be amazed at how they change there tune when you say that you want to assign the contract. They always give you written permission to do so. They don’t want to start marketing the property again.


Re: How should I deal with the bank addendum issue while negotiating with the bank - Posted by Jim IL

Posted by Jim IL on April 14, 1999 at 23:06:45:

I have dealt with the same issues.
The way I handled it was to hire a RE attorney to represent me and do DOC prep for the closing.
My attorney then arranged the closing and made sure the title company did a double close.(he called all parties, and prepared the doc’s. His fee to me was approx. $350 for all of this.)
Basically, he called me and told me where and when to show up.
It all worked out fine.
The title company originally said that a double close could not be done. They had never done one, so therefore, to them, it was impossible. Since my attorney did all the DOC prep, they learned otherwise.

As far as the “Assignability clause”, if that will kill the deal, (to remove it that is), leave it in.
You should have made your offer low enough to compensate for any minor adjustments anyway.
Just have the bank cover thier closing costs, your seller thiers, and you will only have to cover maybe 1% to 2% as yours.
On a $100k home, you should only have to pay maybe $1000 give or take.
If your looking at the right profit, this will not make much difference. And, your profit minus $1k, is way better than ZERO, because you wanted the bank to do something they were not willing to do.
Good luck, and I hope this helps,
Jim IL