Exactly my point. It didn’t make much sense to me either, which is why I questioned the whole process. I guess the plan I’ve heard about is that you get control of the property via a deed, get one sales contract signed that represents the amount owed on the property in order to get the deed. Then get another sales contract signed, but in blank form, and later on, write in the amount that you get the bank(s) to come down to in price and then present that sales contract to the bank. The final step in the event the banks won’t short sale, you simply either tear up the deed (which was never recorded yet), or you simply deed the property back to the original seller and they are in no worse position than they were before, which was still headed for foreclosure.
Personally, I don’t think it makes too much sense, and if it does, it still looks scammish to me.
It sounds like you and I are on the same page in that it doesn’t sound like a solid plan, which is why I wondered why some gurus are pushing the idea.
My subject line for this post signifies things I’ve heard to do for short sales by the gurus around the country. I was wondering if they held water or if they will get you into trouble.
Such as…
Some say when you get the deed “subject to” for a short sale, you should get TWO sales contracts signed by the seller. One represents the sale as based on the current amount owed on the property, and the other one left blank, to be filled in later to match what you can get things negotiated down to.
Problem – at least here in Wisconsin, they have a couple legal terms for that. Specifically, “fraud”, or at least “misrepresentation” because you’re misrepresenting the deal by intentionally creating two sales contracts for the same transaction, not to mention that one of them is signed by the seller, but has no dollar figures on it.
Now of course, some would say, “Who’s gonna know”, but there are just too many ways I could see where people could find out, and then you’re on the 6-'O-clock news as the latest real estate investment scammer.
So… with that said, anyone have a good idea of the RIGHT way to go about Short Sales?
Re: Blank Offer Forms & Other Dumb Ideas - Posted by Todd (AZ)
Posted by Todd (AZ) on November 17, 2006 at 17:45:57:
Mike,
Yes, you have to be careful with all the advice going around out there.
I would stay away from the multiple contracts and such, keep it simple
and straight forward. Do a contract with the seller for the amount you
want to get the lender to short sale to. Forget what is owed, you are
presenting the lender a lower offer, and having a seller signed contract
strengthens your position. It will show the lender what you need to get
the property for, and that the seller is well aware of the price. Of
course you will include all the other paperwork the lender request for
the short sale such as seller statement, and your reasons for needing
to buy the property at that price.
I get the 6-O’clock news thing loud and clear. I hold a broker’s license, so everything I do is all about me protecting that license from consumer complaints. So for me, I have never asked a homeowner to sign a blank document. Really, if you’re being straight with the seller, and I’m sure you are, there just isn’t any reason to. The seller knows exactly what your doing and IMO has more confidence in your ability to get it done if they sign paperwork that’s whole and complete.