back to back transactions..Legal??

Hi Judith, Bryant gave you perfect advice.

I've closed several of this type of transaction. I work with two separate short sale investors and PROPER DISCLOSURE is KEY!! You'll know right away if you're working with someone above board because they will have mounds of disclosures in their paperwork. It's definitely a specialty and not a lot of agents in my area know how to do them or know enough about them but they've been very lucrative for me and I have been lucky to find two excellent companies to work with.

To my knowledge there are no "guidelines" that any bank publishes on how to complete a back to back closing. It's like any other closing. Everything has to be recorded, cleared, payouts made, etc., before the second transaction can be started. Title commitments must be made on the second transaction before the first close. I think that's the key thing to keep in mind.

Good luck.

Replies

Smitty April 12, 2011 at 6:08am

Hi Judith, Bryant gave you perfect advice.

I've closed several of this type of transaction. I work with two separate short sale investors and PROPER DISCLOSURE is KEY!! You'll know right away if you're working with someone above board because they will have mounds of disclosures in their paperwork. It's definitely a specialty and not a lot of agents in my area know how to do them or know enough about them but they've been very lucrative for me and I have been lucky to find two excellent companies to work with.

To my knowledge there are no "guidelines" that any bank publishes on how to complete a back to back closing. It's like any other closing. Everything has to be recorded, cleared, payouts made, etc., before the second transaction can be started. Title commitments must be made on the second transaction before the first close. I think that's the key thing to keep in mind.

Good luck.
Bryant Tutas April 11, 2011 at 11:37pm

Judith. If handled properly there is nothing illegal about a back to back transaction. The key is in proper disclosure to all parties. I would suggest you speak to an attorney in your area who handled these types of transactions to make sure you are what your client is suggesting is done legally. And there are lenders that will not allow them.

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