title seasoning with foreclosure
I've got a preforeclosure house under contract.
Comps: 200,000
Purchase Price: 140,000
Repairs: 20,000
The seller is going to have some money to reinstate the loan but is still agreeing to sell it to us. I want to list it for sale with a re agent. If we find a buyer, how should I close? Do a double closing? If I do, will there be any title seasoning issues with the buyer's lender? If so, how should I handle the situation?
heeranyi,
I wouldn't list it with a RE agent because it can take them 3-6 months to find a buyer. I think you should place an ad in the paper with "Handyman Special!" or something like that. You will get a lot of calls.
Once you find a buyer, you can do a double closing or an assignment of contract. You will need to find a title company or closing agent who is familiar with these types of transactions. If you do a double closing, then you may run into a seasoning problem with the buyer's lender. You can either have the buyer go to a mortgage broker to find an unseasoned loan, or find an investor to flip it to.
To avoid the seasoning issue, then you can do an assignment of contract. Did you write "and/or assigns" after your name as the buyer? If you didn't, then you cannot do an assignment of contract. Even if you did, then make sure nowhere on the contract it says that the contract is not assignable...if it does, then you should've crossed out that line before having the seller sign it and also have the seller initial next to the crossed out line. By having the seller initial next to the crossed out line, it shows he acknowledged it was crossed out.
Good luck.
Tanya[ Edited by tanya1215 on Date 04/02/2003 ]