What To Do With Unassignable Contracts
If a condo developer's purchase & sale contract disallows assignment of contracts, but I find a buyer willing to pay a premium before the condo is actually finished, is there a way of doing a simultaneous closing (i.e. the condo developer sells to me and I sell to the new buyer) without me actually incurring any closing costs, recording fees, doc stamps, etc.?
I would suggest a double close
Depends on if you are using the builder's mortgage broker to close. If so, you'll either have to do 2 separate closings and pay the costs, or ask permission to assign. Their mortgage broker likely won't allow the double-close.
If you were financing through your own mortgage broker, then do a double-close. Your broker should be able to minimize the costs for you.
Alternatively, if your buyer hasn't gotten his mortgage lined up yet, you can owner finance to your buyer, and save much of the closing costs. Then you get to be the bank and collect the interest. You can always sell your mortgage after some seasoning if you want to be cashed out.
Good luck
Peter
You can also accept the premium (cash) and create a lease option for six months at the fixed sales price. This allows for title seasoning, and the buyer can move in even though you have taken title.
Good luck,
Eric & Rosa
[addsig]
Quote:
On 2004-05-20 09:58, moveitnow wrote:
Their mortgage broker likely won't allow the double-close.
Peter,
I'm new so I don't fully understand the problem here.
How would the broker have any say unless there was a minimum duration on the loan? I thought a double close was two closing, one following the other at the title company/attorney's office? If the builder's lender is used to purchase the property in the 1st closing and then the new buyer buys from you in the 2nd closing, short of there being a statement of prepayment penalties by the first lender, what other kinds of statements/clauses would keep one from doing this?
Thanks,
Robert
[quote]
On 2004-05-20 10:26, robertt wrote:
Quote:
On 2004-05-20 09:58, moveitnow wrote:
Their mortgage broker likely won't allow the double-close.
Robert,
My thought was that if the broker works for/with the builder, he will be looking out for the builders interest and may not perform a double close for you, especially if you are getting buyer discounts/incentives from the builder.
True, you can have 2 separate closings, as long as the second mortgage broker (for your buyer) isn't concerned about seasoning. But, you will pay 2 sets of closing costs. One of the benefits of a double-closing is reducing the closing costs since usually one lawyer/broker is involved. If you have your own broker, it might still work.
As always, check with your lawyer, broker for professional advise on your specific situation.
Peter
Quote:
Peter wrote:
True, you can have 2 separate closings, as long as the second mortgage broker (for your buyer) isn't concerned about seasoning. But, you will pay 2 sets of closing costs. One of the benefits of a double-closing is reducing the closing costs since usually one lawyer/broker is involved. If you have your own broker, it might still work.
I guess this is where I'm confused. I thought a double close was 2 simultaneous closings. What is a double-closing then?
Thanks,
Robert
BTW-Is there a way on this forum to be notified of new messages to threads you did not originate?
Robert,
There's a lot of confusion on terms, people call different things the same things. I still haven't gotten a grasp on "correct" term for each closing. This is how I understand it, anyone please correct me if I'm wrong:
1. There is a closing with both parties at the same time basically. The buyer funds both transactions, you don't need your financing in place. Closing costs are thus minimized, and you're a happy camper....everyone needs to agree on this.
2. You close twice. You have a full closing with the seller, and also with your buyer. Two sets of closing costs to pay. No real issue except maybe title seasoning with your buyers lender.
Snek11,
Thanks. All I was familiar with was the 2 separate closings. I had not thought about bringing buyer and seller together with as assignable contract.
Thanks,
Robert
I'm the original poster of this topic and am still not sure I have a clear understanding yet.
First, am I correct that there is no cost difference between a "double close" and two separate closings (except for minor legal savings for having same lawyer perform both)? Either way, you end up paying double closing costs, right?
Second, I don't see any cost savings (as one post suggested) of closing with my lender and then giving the new buyer a lease option for xx months -- still requires two closings with two sets of closing costs, right?
How about the idea of taking out mortgage loan at the original closing which is "assumable" and then transferring the note to the new buyer? Could this work, or are there just no assumable mortgages out there?
BTW - thanks for all the posts .... very educational for us all.
wmirguet