April 23, 2024


Mad about real estate

Closing a Short Sale: How to get a Good deal

If you are a pre-foreclosure investor, with a very stiff competition, you will surely observe how extremely difficult to pursue a closed transaction on short sale houses.  In the past, when times are still not that cruel, together with double closings and continuous closings made, closing short sales have been a lot easier.  It is inevitable with the country’s economic turmoil; all business industries are greatly disturbed.  And real estate sector is included.  With the recent credit crisis, mortgage fraud, and serious restrictions with lenders and title companies, closing short sale deals have been almost impossible to occur.  Real estate investors will certainly pass through tough process if they do not have ample resourcefulness to look for new options.

However, there is still one primary and faster way of closing a good short sale transaction without utilizing double closings, hard money, concurrent closings or the very complex land trusts.  This process makes use of back-to-back closings to obtain all short sale deals closed and settled promptly.  The said proceedings have been reliable to be the most efficient way in handling short sale transactions particularly with the current economic condition.  Back to back closings get a short sale transaction and change it into two separate deals.  The first one is when the homeowner who faced foreclosure will sell the house to the pre-foreclosure investor.  On the other hand, the second transaction is when the real state investor sells the property to the end retail buyer.

The easiest and acceptable means for the real estate investor to conduct this kind of transaction is by using an option contract.  The option contract gives the real estate investor a fixed legal interest in the property through an Option Agreement.  This option is still subject for approval of short sale.

By the time the short sale has the approval, the pre-foreclosure investor must undergo the process of second transaction.  And the deal asks the investor to dispose the property to an end retail purchase.  The pre-foreclosure investor can legally sell the property since the person has made an Option Agreement.  This agreement, which should be informed to the local country courthouse for where the house is located, provides the investor the legal right to sell and market the property.

If you attempt to use a back-to-back closing process, the pre-foreclosure investor must make sure that they have all the important papers and proper documentation for compliance purposes.  If such forms are not brought, addendums and notarized signatures, the pre-foreclosure investor risks the transaction not closing on time, or even worse than cancellation of the proposal.

Always bear in mind that closing a shore sale does not have to be a complex process, if the investor is equipped with the right tools and techniques.  Back-to-back closings are the chief and best way to close short sale deals in today’s time since the real estate market is very unpredictable.  The method is considered and widely used by the lenders, title companies and title insurance companies all throughout the United States.