These questions came to us from a Realtor® /Wholesaler who is a listener to The Red Pill Investor Podcast who had some great questions!
For the past few years I have been doing Lease Option deals but more and more I am coming across sellers that just want cash out and are not interested in carrying seller financing.
This is entirely normal, and believe it or not, it is simply an example of the market getting better. Remember, as a Realtor® you have total control over your business. You can choose to go the conservative route and work with buyers or sellers, or the other extreme to lease options only! The good news is, as the market changes, or contracts, it gives you an opportunity to pick the type of market you are going to be in. For example, when I saw back in 1996 that REO was a predictable trailer every now and again, with the market going up as quick as it was, I figured that it would come down eventually. That’s why I got in REO. Same thing with you. Part of our job is to anticipate the market as best as we can.
Can you do an assignment when the end buyer needs to get a mortgage to purchase?
No. The end use buyer who gets a loan typically has the loan through a mortgage broker or lender. When they do, the bank has a person called an “Underwriter” who ensures that the “i’s are dotted, and t’s are crossed” to make sure they can sell the loan after closing. One of the conditions is that the person who is on title must match the contract. The problem with equitable interest is that; while it is one of the “rights” you get in contract, equitable interest is not enough to qualify for the entire “Bundle of Rights” which is required by the Lender. It’s just a requisite for them to be able to sell the property.
Once we get a property under contract, what wording do we need in order to place the property on the MLS?
Generally speaking, you cannot put it on the Multiple Listing Service during a Wholesale deal. “Whole-tailing” however CAN be done in some States where the Multiple Listing Service has no restriction as to the ownership interest of the parties who intend to list it. However, it is advisable to be completely aware that by placing it on the Multiple Listing Service, it is extremely difficult to fend off any Article 1 or Article 4 Code of Ethics Violations charges if things go sideways. (Just my two centavos!)
Thanks for the questions!
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