Closing a Short Sale Transaction

The bank will give you a deadline in which it must receive the short sale payoff. Arrange the closing to take place prior to the stated date. Always use your title company or attorney whenever possible.

• It’s a bad idea to wait until your last day to close in case something happens and you need a few more days.

Should you need a few extra days, have the title company/attorney call the bank and ask for the extension. Typically, if the title company/attorney asks for it, it won’t cost you anything. If you ask for it, you’ll have to pay the daily per diem, which could run into the thousands.

• When the bank agrees to accept your offer, ask what their “per diem” rate is just in case you can’t close on time.
  

Be sure all the necessary people are present at the closing and that the money is there. Once the property is closed, you can rehab and retail it, keep it for long-term rental, or do what we do … wholesale it quickly.

• You can make most of your money by combining two techniques: Short sale the deal and then wholesale it to a rehabber.

Please note that if you want to wholesale your short sale property at closing, you must coordinate a “double or simultaneous closing” with your closing agent and buyer.

This is perfectly legal and requires no cash or loan from you.

In a nutshell, the rehabber comes to the closing with cash, you buy the property from the homeowner and immediately sell it to the rehabber. The rehabbers funds pay for both transactions. When interviewing title companies or attorneys ask them if they do double closings. If they say no, they are not investor friendly so keep looking.

One of the easiest ways to find an investor friendly title company/attorney is to attend your local REIA group. These type of people are members and are actively seeking your business.