Posted by PBoone on January 21, 1999 at 19:14:17:
I mean it is a common mistake by people who do not know you CAN do it.
another flip question - Posted by lezlieTN
Posted by lezlieTN on January 21, 1999 at 18:21:55:
I had a mortgage broker tell me yesterday that I could not flip a property at close i.e. have a double close where i hold the property only to go into the other room to my buyer. He says even though I have the house under contract, I don’t hold the title so therefore it isn’t mine. Only a real estate agent can sell another person’s house. Has anyone had this happen, also any suggestions how to handle this in the future?
Re: another flip question - Posted by J.P. Vaughan
Posted by J.P. Vaughan on January 22, 1999 at 09:36:06:
If you are doing a simultaneous close, why are you even
dealing with a mortgage broker??? Your new buyer’s
financing will pay for your purchase, and you take
the fallout as your profit. This kind of deal is done
all the time. Find an escrow company that knows how to
handle this type of closing.
JP Vaughan
Re: another flip question - Posted by Randy -IL-
Posted by Randy -IL- on January 22, 1999 at 24:47:30:
Not that I could add much to what the others have to say but…
To me the dilemma is quite simple. You are only selling your own property.
Since you are purchasing the property only to hold title for a few seconds, during those few seconds you are allowed to do what you please with your property. And that includes selling it for a profit!
If you still have problems with that, just assign your assignable purchase contract for your desired profit. That way it doesn’t matter who has title. You have title to the assignable purchase contract and that’s all you need.
Find another broker who really likes to make money. Apparently, the one you are speaking with doesn’t.
Re: another flip question - Posted by SCook85
Posted by SCook85 on January 21, 1999 at 22:14:33:
I can assure you that the mortgage broker is not reffering to law but probably to the rules of the mortgage programs he uses to finance. If a lender will not allow you to sell a property that is not in your name that has nothing to do with state or federal law.
To the best of my knowledge there are no laws that prevent you or anyone from doing assignments or simultaneous closes, but lenders can prevent it with the guidelines they impose to for financing.
SCook85
Re: another flip question - Posted by Rob FL
Posted by Rob FL on January 21, 1999 at 22:04:46:
The bottom line is what do the contracts say you can do. Here in FL our FAR/BAR contract does not say anywhere in it that you own the property at the time of signing the contract. It requires (1) that you give a general warranty deed to the buyer (which means when you sign the deed you are stating that you own the property, a lot different than when you sign the contract). It also requires title insurance to the new buyer (obviously you have to get the property from old seller to you to new buyer to give title insurance, but it doesn’t matter if there are no middlemen or 20 middlemen as long as the chain of title is complete). Mortgage brokers don’t know much about title insurance and giving out advice like that is very dangerous on their behalf (speaking out of ignorance is a good way to get sued when you are a supposed professional).
Re: another flip question - Posted by fc
Posted by fc on January 21, 1999 at 20:32:43:
Your mortgage broker is wrong! Handle the situation as follows: In your contract to sell the property to your buyer, in the space where your name appears as “Seller” follow it with the phrase “as contract vendee”. Ex. “John Smith, as contract vendee”. This states to your buyer that although you are not on the title, you have a fully executed contract to purchase from the actual owner of record and can therefore convey title once you in fact take title. You then set up the contracts so that the closing dates occur at the same time and place. I have done this myself several times and it is done by many investors every day of the week. Speak you your attorney for more details.
I suggest you get a mortgage broker who has more experience or it will cost you money. Best of luck!