The Real Estate Encyclopedia
Turning short sales into big profit?
Category - Mortgage Questions - Foreclosure & REO FAQ's

We came across this Article that was on the front page of the Tampa Tribune and we thought it was worth getting on our site:

http://www2.tbo.com/content/2009/may/03/na-turning-shortsales-into-big-profit/

Compliments to Writer! This article has caused people to question some of the activities that have recently been happening in our area. Let me start off by saying ethically the listing agent represents the Seller. We can facilitate both sides of a sale and represent the Buyer and Seller at the same time. But what is happening here the listing agent is not submitting the highest and best offer to the Original Sellers Lender. We have been doing short sales for nearly 3 years and have been quite successful at assisting our clients in getting the sale approved with no adversities.

All the things that some agents are hiding behind are legal in the way they were implemented.  The one thing that is questionable is CAN IT APPLY IN A SHORT SALE? Since our goal in a short sale is to get the best offer with the best terms for our Client, so that they can get out of the bad situation they are in. I wonder if that is the listing agent or "Investors" ultimate goal. Or is it just to make as much money off one sale.

Ultimately this is a bad day for the True Professionals in the field and we will have to deal with the ramifications of these type of people. What a shame it is. We have spoken with several banks and they will not accept Option or Even Assignable Contracts. So I hope all that are involved in this type of practice have put some of the cash they made away for a rainy day, because it is coming soon.

Things to consider. Is the bank seeing the end buyer’s offer? If there is a contract; can the home remain Active in the Local MLS System? Is it really a Short Sale to the end buyer? The answer to these questions would probably be NO! And that is not a good answer.

And just a few more things to think about. Whose money is funding the “Investors” Closing? Are all Closing Costs Paid on” Investors” purchase from the Bank? Or is just the end buyer’s sale? I am sure the County would like to get paid on a sale that happened. Why would the bank accept less from the investor when there is an end buyer who is willing to pay more (On the Same Day!) This all sounds kind of fishy to me. The truth of the matter is that there are good and bad people in every career out there and let’s hope that this does not tarnish the good ones.  

Oh we thought we would add that we submitted an offer for one of our customers to purchase a home in Valrico Last night, it was full price $130,000.00, and buyers are pre-approved up to $160,000.00 and we received a written message that said “Nick & Cindy- Per our discussion earlier. The seller is not accepting FHA on this particular property. If buyer can secure other financing, please let me know.’

I asked when we spoke on the phone what does this mean.  I was told by the agent “This was a flip with an option contract and due to the seasoning rule for FHA; they were not accepting FHA Offers”

 So this home cannot be purchased by our customer because they are entitled and choose to use an FHA mortgage.  All so an “Investor” can make their money on the flip. It is a sad day.

 
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Mortgage Questions - Foreclosure & REO FAQ's
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