Protecting Interest At Closing
Quick question for all relating to protecting our ‘interests’. I have a seller. We were originally going to purchase on an L/O. Fortunately, we had a spread that will make ‘down payment assistance’ (using one of the charity org.) a great option to just sell it right away.
The seller is pre-foreclosure. The buyer is in the process of being approved w/ a broker. It looks like things will go through okay, except that the buyer will almost certainly have to obtain FHA funding. Therefore, a simultaneous closing is out of the question (per recent FHA seasoning guidelines, right?).
Problem...my understanding is that, 1) We can’t assign our contract w/ seller to our buyer. At least this is what I’m gathering form posts/forums/and questions to other investors. (i.e. Lenders frown on ‘assignment clauses’ and fees. 2) We can’t double close.
Solution…Can we somehow protect our interests and insure that we get paid, if we just allow the transaction to take place between the seller and buyer?
No, the seller isn’t aware of our profit. Although, I’m not sure that would be a problem. We can tell her if needed.
She IS getting some cash. In fact, our only option may be to give it to her this week so that she can acquire an owner financed property that she has her eyes on. I’m working on the possibility of negotiating with the owner finance-er, to see if we can ‘hold’ the cash to our seller (which will double as her down payment on the new property) until we close on this deal. If not, our only option may be to give her the cash now so that she can move on this other property.
I realize that we probably CAN make her move out, regardless (we do have an exclusive option), but is making her angry or playing hardball really the way to get things done?! I’m looking for a win/win here. I just want to make sure that she doesn’t experience ‘seller’s remorse’ when she sees a check with her name on it that she is expected to sign over is us.
I’ve read several articles/posts that reference a ‘performance mortgage’ as a possibility. But, I can’t seem to find the info/explanation/uses in context anywhere. Any suggestions? Thanks in advance!
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