Foreclosure Closings
I am a new investor starting out in pre-foreclosures. I signed a purchase agreement with a seller yesterday for $53k the house is worth $85k-$90k. The seller actually owed a little over $46k and we agreed on giving him the remainder. Since there is a bit of equity, we don't want to pay full closing costs twice - once when we buy it and once again when we resell it. Are there any suggestions. We have come across more than a few motivated sellers but if we calculate a couple of closing costs and possibly a real estate agent, it squeezes the profits out. We are also very interested in the short sale but can't find any free beginners advice that gives an overview of the subject. <IMG SRC="images/forum/smilies/icon_confused.gif"> [ Edited by vinmac on Date 11/11/2003 ]
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We are also very interested in the short sale but can't find any free beginners advice that gives an overview of the subject.
This board will be your best free advice to learn about Short Sales. However, because it is free, you cant expect to get a complete education from it. There are many fine professionals here that can answer questions for you. But if you are serious about investing in real estate, you should consider investing in your education first!
Welcome to the board and best of success!
BAMZ
Thanks for advice. I have attended different seminars and will continue to invest in my education. My primary question is still regarding closing twice on the same deal. Once when you buy and once when you sell. The closing costs add up and squeeze the profits out of many potential pre-foreclosures. Any suggestions?
Hi. As some of you know, I am by no means an expert on anything having to do with real estate. However, from what I've been reading about on this site, you might be able to do a sub2 deal with the seller. I might be mistaken, but at least investigate that thought with some of the people here who are experts. Zach
Vinmac,
You should first lock up the deal in a contract and with a Sub-2 clause. This way there is a scapegoat in case you cant find a buyer in time. You might be able to do a double closing at your local title company. Basically You and the seller are in one room first to sign all the documents to complete the transaction, then you walk to the next room with the buyer, collect their money and deed the house to them. The escrow agent pays off the lender any existing money, then pays the seller, and then gives you the rest(minus closing costs). Of course this only would happen if both the lender and escrow agent/s agree to do a simultaneous closing. If you dont have money to rehab the house and sell it for the FMV you could also sell your rights of the house to another investor. This will get you out of the closing costs. If you have any more questions you can PM me.
Good Luck