Assigning A "Short Sale" , What Needs To Be Done?
Can anyone tell me the proper steps to "assign" a short sale deal so that I do not miss out on monies owed for finding the deal? Currently, I wrote the deal up on a sales contract for a price of $25K with the owner understanding that she will have to sell her house short with approval of the lender. I have not done a "short sale" before and would rather assign to an experienced investor. Here is the specifics of the deal: ARV: $80K, Repairs: $16K, Payoff: $55K. The property needs repairs and can't hold the $55K owed in its current condition. To my understanding a "short sale" deal could have this property acquired in the $25K-$30K range. Also, what would be a fair assignment fee for this type of deal? Thanks, in advance, for TCI members help and wisdom. PM are okay by me. 
In most cases, you will not be able to assign a short sale. The lender doing the short will usually not allow it. The reasoning is simple. IF the property is so bad that they need to short sale it, someone else shouldn't be willing to pay you an assignment for to get into the deal.
Roger
First, you should determine if the property is a suitable candidate for short sale consideration.
Generally, if you can't close as a Principal, or if you don't have 1) a working knowledge of LLCs, &/or 2) an existing network of ready, willing, and able Purchasers to accept the 'assignment' you shouldn't be working shorts.
Quote:
On 2004-01-20 10:51, TheShortSalePro wrote:
Generally, if you can't close as a Principal, or if you don't have 1) a working knowledge of LLCs, &/or 2) an existing network of ready, willing, and able Purchasers to accept the 'assignment' you shouldn't be working shorts.
I think this is exactly the reason for the post. It also sounds as though he just found an interesting property, got it under contract, and is now looking for something to do with it. Nothing wrong with that.
I don't know what this deal would be worth to another investor who is experience at doing short sales, but don't be surprised if any finder's fee be contingent on a successful SS. Which means you might have to wait to get paid.
Good luck.
[addsig]
That is correct swetbak. I just came across this deal and want to assign it or get some type of compensation for it. I have not done a short sale and am not interested at the moment.
My question to you would be what are your intentions if you can't find an investor to assign the contract to?
Are you prepared to follow through with your purchase with the homeowner?
This homeowner is probably counting on you in good faith to purchase the home and save their credit from the foreclosure. The homeowner being solicited by a 'real' investor who would follow through and perform on their contract is now not an option since you have the house under a contract you never intended to follow through on.
I personally think you are doing a lot of damage to the reputation of this business and furthering the notion of the self-serving investor who is only looking out for themselves at the expense of the homeowner in foreclosure.
If your intentions were not to follow through with a purchase, this should have been spelled out clearly to the homeowner that you were only actually going to perform on this contract IF you could find a REAL investor to buy it from you. The homeowner then could have made an informed decision as to wether the risk was worth tying up their house with you in the first place. [ Edited by The-Rehabinator on Date 01/20/2004 ]
The homeowner is fully aware that I will be working with another investor to help her get rid of the house. She understands the premise of the short sale and is willing to do whatever is necessary to complete the deal. I would not tie up her property in a manner for greed. Your concern is appreciated.
HI Lostonian, Get a hard money lender involved ASAP. The bank will NOT go for a contract that is assignable on a SS. You need to convince the bank at least 2 things 1) This property WILL go to foreclosure and 2) You can stop that from happening NOW. Assigning the contract is too soft for this type of deal. Good Luck.
Just negotiate the short sale with the purchase and sale agreement in your name, and before you get the pay off letter, tell them that you have decided to put it in your partners name. They will usually tell you to prepare another purchase and sale agreement with your partners name on it as the buyer. Before you write up another P & A which should only take a few minutes and can be done at closing, instruct your buyer to give you your fee upfront and let the transaction go through. At this point, youa have already got paid for your services. Make sure its either cash or certified check only. No personal checks!