Thanks for the response. I searched the archives before asking the question, but for some reason the search turned up no results. A subsequent search and reading through as many posts as I could (so far) has given me more insight into the idea of getting the deed.
While many people say yes, get teh deed, some well respected people say no. Figures.
I am currently working with a homeowner that is upside down on a property that is not only worth much less than he owes on the mortgage, but needs some rehab. There is no way he could sell it on his own .... just will not happen...I asked some other investors about it they are willing to walk me through the procedure.... the first thing they asked me to do was to make sure he is willing to deed me the property and that he understands that he will see no enrichment from the SS before we started anything.
Now, I must admit that I didn't fully understand why I had to make sure he would deed me the property, but I understand now that it's to prevent him from flaking out at the last minute, a way to protect my interest after spending time energy, and money on preparing the short sale.
So...to all of you guys that DO get the deed, how do you explain this to your the home owner? What do you tell the home owner about the fact that the SS may NOT be accepted. What do yo do with the deed then?
Number one: I can' t promise you anything, homeowner, but realize that I can only BETTER your situation (no f.cl. sale on record and possibly some cash).
If you get the deed, you just got the property subject to the mortgage. HELLO?? Anybody out there???
If the house is worth 100k but they owe 120k, you get a contract with them to purchase the property for 60k or 70k or whatever, provided that the bank will accept the purchase price as payment in full on the outstanding loan balance. That guarantees that they will not flake out. You have a contract with the sellers.
You are trying to buy the property, if you get the deed now, you already own the property. No sense whatsoever.
yes somebodyis out here....and if you read my followup you might have noticed that. my question was how do you explain it to the seller. But no matter.... I found the answer to my question by reading almost every post her in the shortsale forums.
78sscrei - I know it seems confusing, but it is rather simple. These people have already lost their deed and you are helping them. I have people throwing their deeds at me and I can choose the best ones. Sometimes I try to give them some cash too, not always, but when it's feasible, sure. They have already lost their property and we are helping them.
If you lock it up, get the deed, and you can't work the numbers (or the short sale), then exercise your right to cancel (in your contract), say, "I'm sorry, I really tried" and then move on.
They are no worse off...you lost a few hours...but you didn't screw yourself...next.
You don't have to, but I WOULD!
If you don't have the deed, and you do all this work, what's to say that they don't try to reneg on their end of the bargain.
Sure, you can take them to court or mediation...but that would too much risk if you ask me.
Thanks for the response. I searched the archives before asking the question, but for some reason the search turned up no results. A subsequent search and reading through as many posts as I could (so far) has given me more insight into the idea of getting the deed.
While many people say yes, get teh deed, some well respected people say no. Figures.
I am currently working with a homeowner that is upside down on a property that is not only worth much less than he owes on the mortgage, but needs some rehab. There is no way he could sell it on his own .... just will not happen...I asked some other investors about it they are willing to walk me through the procedure.... the first thing they asked me to do was to make sure he is willing to deed me the property and that he understands that he will see no enrichment from the SS before we started anything.
Now, I must admit that I didn't fully understand why I had to make sure he would deed me the property, but I understand now that it's to prevent him from flaking out at the last minute, a way to protect my interest after spending time energy, and money on preparing the short sale.
So...to all of you guys that DO get the deed, how do you explain this to your the home owner? What do you tell the home owner about the fact that the SS may NOT be accepted. What do yo do with the deed then?
Thanks again
Number one: I can' t promise you anything, homeowner, but realize that I can only BETTER your situation (no f.cl. sale on record and possibly some cash).
If you get the deed, you just got the property subject to the mortgage. HELLO?? Anybody out there???
If the house is worth 100k but they owe 120k, you get a contract with them to purchase the property for 60k or 70k or whatever, provided that the bank will accept the purchase price as payment in full on the outstanding loan balance. That guarantees that they will not flake out. You have a contract with the sellers.
You are trying to buy the property, if you get the deed now, you already own the property. No sense whatsoever.
rickpozos
yes somebodyis out here....and if you read my followup you might have noticed that. my question was how do you explain it to the seller. But no matter.... I found the answer to my question by reading almost every post her in the shortsale forums.
Thanks to all here that post useful information.
Rick,
Some of the most popular short sales stategies right now recommend getting the deed even though you might not purchase it!
Just becaue you get the deed doesn't mean you have to file it. (I know there's risks to that)
Exit criteria can be:
1) Quick turn, find smeone else to buy the property from you.
2) Cure the arrears with down payment money from a LO t/b or some one else..
3) Use private funds to cure the arrears and hold for a while.
You always CYA yourself, if the lenders don't short enogh or your buyer can't get funded, and the house goes to foreclosure, you are not responsible.
You MAKE the sellers understand this, and agree to it or else, DON'T DO the DEAL....
The sellers will be getting CA$H when the house re-sells..
There hundreds of ways to skin this cat but this one way..
Always be honest and say what you are going to do.. So you CAN'T say I guaranteed that I will buy your house.
Hopes this helps..
Bginvestor
Wow, seasoned investors really seem to have chip.
78sscrei - I know it seems confusing, but it is rather simple. These people have already lost their deed and you are helping them. I have people throwing their deeds at me and I can choose the best ones. Sometimes I try to give them some cash too, not always, but when it's feasible, sure. They have already lost their property and we are helping them.
If you lock it up, get the deed, and you can't work the numbers (or the short sale), then exercise your right to cancel (in your contract), say, "I'm sorry, I really tried" and then move on.
They are no worse off...you lost a few hours...but you didn't screw yourself...next.