OfflineHi everyone,
I'm new to this website. I bought the book this month. I have been reading it and have been learning alot of great tips and techniques.
I have a question and hope someone can answer it for me.
When you look into assigning a property my understanding is you go to the seller to negotiate a price right. Lets say the seller is under which means he owes more to the bank than what the property is worth. In that situation do I still negotiate with the seller or with the bank.
I would really appreciate if someone can answer this.
Thanks!!!!
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Hi,
If the person owes more then what the home is worth on FMV but they wanted to get rid of it they would have to do it as a short sale. And those can sometimes take 3-8 Months on average depending on the banks for them to close with you and it is around 40 pages of document pages to complete one also.
Jason
Never Give Up On Your Dreams
Good morning and welcome to the DG family and your new life. On a short sale you find a house under market hopefully, you lock it up on a contract, with exit clauses and assign it to another buyer. In the forms and docs section you will see at the top of the offer it will say something like " I________(the buyer, your name) and insert and or/ assigns.
You are locking up the deal and selling it to another buyer for a fee.
If a seller is in trouble and is in pre foreclosure, this is where a short sale would come into play before it goes to the auction block. This type of transaction is long and you will deal with the bank and the seller.
Assignments are a great way to start, especially when you do not want to use any of your own money and if you did you would get it back from who you sell it to. Hope this helps you out and good luck investing....Jan
Hey there
What you're talking about are Short Sales. In that situation you'd have to negotiate with the bank, not the seller. If the homeowner hasn't been foreclosed on yet, then you have to get permission from the homeowner to negotiate with the bank (assuming its not already listed in the MLS). If the foreclosure has already happened then you can obviously go straight to the bank. That's my understanding of short sales.
KEEP IN MIND...Bank owned homes (especially short sales) tend to be VERY difficult to assign. The banks typically wont accept offers with an assignment clause. But I've heard it done on the rare occasion, and many here in on DG.com are finding ways around that obstacle which is what's so great about this site.
And as it was already mentioned above, short sales tend to lag and it can take MONTHS to get a response about your offer from the bank
When it comes to assignments I've found its much easier to tackle Non-Bank owned homes and FSBO's. Then you don't have to deal with the hassle of the banks..
Good Luck
Jordan
"You gain strength, courage, and confidence by every experience in which you stop and look fear in the face. Do the things you think you cannot do. Tough times never last, but tough people do"
A real estate guy told me that it is illeagel in az. to do an assignment with anybody but the seller. Is this true?
To the best of our knowledge NO state has made assignments illegal; however, some states have made it more difficult than other states and in these situations you may want to use a double closing or simultaneous closings.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Hi everyone,
I appreciate everyone's reply. This was great information. Thanks!!!!
Can someone who has performed a few Assignments please tell me if I am correct on these steps!
1. Find a property. Either a FSBO or REO I understand there are different steps with each one. Get interest from your Seller.
2. Do comparables, get a Broker's Price Opinion or have it appraised by an Appraiser. Why would I pay for an Appraisal at this point? Any creative ideas on how to get money for this?
3. Negotiate a price that is a minimum of 65% of FMV. Add your desired profit and any costs of acquiring the property to the top of the accepted offer and sell it as cheap as possible to your list of Investors. A title check is performed by me.
4. Offer is counter offered or accepted by owner and then Due Diligence is needed on my part.
5. Wait for Owner or Bank to accept the offer with the Assign clause in it. Once it is accepted I would record it at the Deeds office or do I record this now? Should this be recorded after the Earnest Money Deposit is accepted?
6. Owner or R.E. Broker representing the Bank will ask for Earnest Money Deposit in order to accept offer. Usually 1% up to 5%. The banks will NEVER accept a $500.00 Earnest Money Deposit in Massachusetts.
7. I have to find a way to get the Earnest Money. Where? I have no idea. Investor probably. Coastal Funding does not provide Earnest Money Deposits. Once I get the Earnest Money I give it to My Attorney or my Title Company and they put it in an Escrow Account.
8. I schedule a Pest Control and Inspection of the property and make sure it is OK.
9. I have my Buyer look at it. Should he pay for the Inspection at this point or do I?
10. He likes it and he wants to buy it. Me, my Investor buyer and the Owner of the property for sale all go to closing and I have my Investor Buyer sign my Quit Claim Deed. Is this correct?
11. My attorney collects my check and gives it to me or I get it myself if I have no Attorney. I do not have any money for an Attorney anyways. This is a hurdle I am having to get around.