Posted by Jim IL on February 15, 2001 at 14:54:25:
Dave,
I’ve handled it a couple of different ways.
But, the most common way I deal with it is to not handle it at all.
The sellers generally do not ask about it.
When they do, I explain to them that on some occassions I will run accross a buyer who looks as though they will be able to get a loan soon, but may not qualify for the higher price that I need to sell to them with.
So, in that event, I will offer to “Assign” the agreement between myself and the seller, so that the buyer can get a loan for that lower amount instead.
I also have told sellers in the past, if for some reason we have trouble moving a home due to my higher rent and higher price, we may need to lower my numbers to the ones that I am paying the seller in order to sell the home faster.
IF I need to do this, then I need to be able to assign my deal to a buyer.
Since I am a full time proffessional investor, I am better equipted to tell whether or not the buyer is a good one and qualified than most people, so it is easier for me to handle all that.
The whole idea behind selling a L/O to a seller is that I take away as many of the possible headaches from the seller, and this allows just that.
And if an attorney or seller is stuck on changing my agreement, then I tell them this;
“If we do not change this, does this mean we cannot come to an agreement?”
And if they say “yes”, then I say…“NEXT!”
Simple.
Either sell to me on your terms and MY PRICE or with MY TERMS and a mutually agreeable price.
I do not NEED to buy anyones home, they NEED me to buy them.
Title seasoning issue helps sell a L/O to attny - Posted by Jim IL
Posted by Jim IL on February 14, 2001 at 23:23:27:
Hello all,
Well, I met with a seller tonight, and their attorney.
Apparently the attorney is a family friend who was asked to sit in on our meeting.
Anyway, after looking the deal over, I felt the best offer was a L/O.
The attorney did not like this and wanted to go with a land contract.
I told him that IF this was the only way he felt there could be a deal then I’d just leave and wish them luck with selling.
The sellers said, “HEY!, this L/O thingee sounds like EXACTLY what we need!”
So, the attorney asked if we could meet another day so he could “look over” the L/O agreement.
As the good little investor that I am, I reached into my “Buyers brief case” and whipped out a form.
I asked the attorney if we could just go over this now and solve his clients problem TONIGHT?
He smirked and said, “sure, lets look it over”.
And, as usual, he liked almost all of it EXCEPT the assignability clause.
Just about EVERY time an attny looks at my agreement they pick out this clause and try to get me to change it.
And sure enough, this one wanted the seller to have the right to refuse the assignment, or at least approve it.
So, I thought for a second and used this as an explantion.
I already knew this attny was a RE attny who does some work for a local title company, so I asked him if he was familiar with some lenders wanting title seasoning?
He said “yes, I am, this all came about due to the illegal flipping practice that has taken place over recent years.”
I said I knew that.
I then explained to him that if my sub-tenant/buyer went to a lender and was faced with this issue, we could just assign the agreement to the sub-tenant/buyer for a fee to me, and then the seller could close with my buyer, thus avoiding the title seasoning issue.
The attorney liked this answer.
He then looked at his clients and said, “This paperwork looks fine, and if you agree with what he has to offer, then go ahead.”
And they did!
So, I may just use this tactic again with attorney’s in the future.
Frankly, I would not use this explanation with a seller, since they would not really understand in most cases the title seasoning issue.
But then again, it seems rare these days that I deal with attorney’s at all.
I just wanted to share this idea with you all here, in case you are in the same situation some day.
Title seasoning issue helps sell a L/O to attny - Posted by evelyn
Posted by evelyn on February 15, 2001 at 24:46:08:
GOOD JOB, Jim. You showed that smart alec attorney! I think I will keep that in my file for future use! Keep that briefcase full of those forms and whip 'em out when some smarty pants lawyer, or anybody else for that matter, tries to that on you!!
Evelyn