I had a meeting today with a homeowner who definitely wants out of the house. I bought your reading materials on the short sales, including the forms, and now I have a deal at hand. I have a question regarding the forms when doing a short sale. Do you have some examples in which you can share on how to fill out the forms?
Especially the purchase and sales agreement. There are a couple of examples on how to fill out the forms for a couple of forms but the other are blank.
Some other questions. please explain line 2.A on the P&S agreement. Am i supposed to give her the $100 upon signing this contract? I understand the $10 for the deed. Also, she needs $5k in order to move. How best to approach this issue? When does she receive the $5k? Would that seem like a kick-back? best legal method…
Please excuse so many questions, this is my first time doing a short sale.
Can you also share how to fill out the PYA letter? What goes on the first two lines?
Please advise. Thanks very much for your assistance.
Drew
Answer:
Drew,
We just updated the short sale manual. It would be on page 54-56 and page 38. On line 18 in the P&S agreement, you need to put that the sale is contingent upon short sale(s) being accepted. That way if they are not accepted, you can back out. You do not want to purchase this home for full price.
The $100 is just a binder deposit to make things legal and to show the bank you have some skin in the game. Don’t give this to homeowner! More than likely they will just keep it and spend it. Then if the deal falls through, good luck getting it back. Probably not going to happen. You can open up an escrow account and put it safely in there if you want.
Do not ever give the seller any money (5k) in this case until the deal is finished. Meaning you have either purchased the property or you have found a buyer and have closed with them. It’s illegal to give the seller any money when you told the bank they would receive zero. You need to buy their personal belongings and make sure you have a bill of sale proving you did in fact purchase these items – couches, lawnmowers, tools, etc. with a signed bill of sale.
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