Obtaining Negotiation fee from shortsales

[ryanpal]

how are you guys getting the negotiation fees from the bank?  both times i had them on the preliminary hud and the negotiator said "we don't pay that"

anyone have any input on how to get these fees approved?

[psreis]

You will want to make sure to not call it a negotiation fee.  They always throw those out.  Instead, in the Title Charges area of the HUD statement (in the 1100 section) add a line that says Clear Title and your company name (other than the company doing the negotation - perhaps a sub company of yours).  If they question it just let them know that this was the fee to clear the title.  Most likely it will not even be questioned and will be paid.

Good luck.    

[ryanpal]

now that's one i haven't heard yet ;]

3 questions:

1. what do you put as the charge on this?
2. do you use the same company that you're negotiating under?
3. if they ask...what had to be cleared...what would you say?  ;]

ryan

[psreis]

Good questions:
1.  The charge simply says "Clear Title". 
2.  Use a different company name (it is good to have two companies established so one is the negotiating one and the other one to list as the company that cleared the title.
3.  If asked simply say that you found some title issues that needed to be cleared up and this company did that for you.  No one has asked me to be more specific. 

I hope that helps. 

 

[nsu1997]

Interesting idea. This is exactly what I've been looking for - I'm trying to avoid having to do double closings, land trusts, etc since most banks aren't even considering closing a deal with anything out of the ordinary going on. I'd rather the buyer purchase directly from the seller and I get paid on the HUD as a fee.

Also what would be the maximum range dollar-wise for this Clear Title fee, so to avoid the banks getting froggy and start asking questions? For example, if I charge a $12K Clear Title fee on a $260K deal would that likely be considered reasonable or excessive?

Lastly, would placing a lien of some sort on the title help ensure you get paid at closing? If so, what kind of lien, and how do you go about placing the lien?

[ryanpal]

Good questions:
1.  The charge simply says "Clear Title". 
2.  Use a different company name (it is good to have two companies established so one is the negotiating one and the other one to list as the company that cleared the title.
3.  If asked simply say that you found some title issues that needed to be cleared up and this company did that for you.  No one has asked me to be more specific. 

I hope that helps. 

 

looks like i'll need 3 llcs then.  1 for buying, 1 for negotiating, 1 for the clear title fee ;]

[ryanpal]

oops i almost forgot.  do you put this on the preliminary hud with your first package submission or not until the final hud?

[psreis]

Interesting idea. This is exactly what I've been looking for - I'm trying to avoid having to do double closings, land trusts, etc since most banks aren't even considering closing a deal with anything out of the ordinary going on. I'd rather the buyer purchase directly from the seller and I get paid on the HUD as a fee.

Also what would be the maximum range dollar-wise for this Clear Title fee, so to avoid the banks getting froggy and start asking questions? For example, if I charge a $12K Clear Title fee on a $260K deal would that likely be considered reasonable or excessive?

Lastly, would placing a lien of some sort on the title help ensure you get paid at closing? If so, what kind of lien, and how do you go about placing the lien?

I still do double closings with this technique, however, if you choose to just insert your fee and just do an A - B that would probably work as well but I haven't done it that way.  The fee is whatever you decide. 

In the situation where you are doing just one closing, I would recommend you record your interest at the courthouse otherwise you may get overlooked.  File a notarized Affidavit and Memorandum of Interest in Real Property at the courthouse.  The title company you are closing with will most likely provide the form if you don't have one and for a fee will file it for you or tell you how to do it at your courthouse. 

With all that said, I would recommend doing double closings to maximize your profit. 

 

[psreis]

Good questions:
1.  The charge simply says "Clear Title". 
2.  Use a different company name (it is good to have two companies established so one is the negotiating one and the other one to list as the company that cleared the title.
3.  If asked simply say that you found some title issues that needed to be cleared up and this company did that for you.  No one has asked me to be more specific. 

I hope that helps. 

 

looks like i'll need 3 llcs then.  1 for buying, 1 for negotiating, 1 for the clear title fee ;]

Yes, that is correct.

[psreis]

oops i almost forgot.  do you put this on the preliminary hud with your first package submission or not until the final hud?

On the final HUD-1.

[nsu1997]

Interesting idea. This is exactly what I've been looking for - I'm trying to avoid having to do double closings, land trusts, etc since most banks aren't even considering closing a deal with anything out of the ordinary going on. I'd rather the buyer purchase directly from the seller and I get paid on the HUD as a fee.

Also what would be the maximum range dollar-wise for this Clear Title fee, so to avoid the banks getting froggy and start asking questions? For example, if I charge a $12K Clear Title fee on a $260K deal would that likely be considered reasonable or excessive?

Lastly, would placing a lien of some sort on the title help ensure you get paid at closing? If so, what kind of lien, and how do you go about placing the lien?

I still do double closings with this technique, however, if you choose to just insert your fee and just do an A - B that would probably work as well but I haven't done it that way.  The fee is whatever you decide. 

In the situation where you are doing just one closing, I would recommend you record your interest at the courthouse otherwise you may get overlooked.  File a notarized Affidavit and Memorandum of Interest in Real Property at the courthouse.  The title company you are closing with will most likely provide the form if you don't have one and for a fee will file it for you or tell you how to do it at your courthouse. 

With all that said, I would recommend doing double closings to maximize your profit. 

 

psreis, how are you able to get around the title seasoning issue when you do your double closings?  ISO you have a lender that doesn't care about title seasoning, which is what I'm looking for.

By the way, I found an interesting technique on Youtube to locate lenders who don't care about title seasoning. I'm doing this Monday morning...definitely worth a try! http://www.youtube.com/watch?v=JeGrA2rsj94