Kevin's Blog


Are short Sale Flip Transactions, aka back to back closings, Legal or Illegal?

I have often read,here on Active Rain and elsewhere, the ongoing debate and question are short sale flip transactions, aka back to back closings, legal or illegal?  

This leads to the debate of Real Estate Investors vs Real Estate Agents.  My experience as both an investor and realtor allows me to have a unique perspective and understanding of both sides of the equation, but that is a debate for another time.

As an owner of a real estate brokerage, title company and as a real estate investor in the Bucks County, PA and surrounding areas, this has been a subject I have paid very close attention to, especially over the last 12 months.    It is no secret distressed real estate can be found anywhere and everywhere and it is not hard to find.  As short sales and reo properties become more and more prevalent and are no doubt now a part of every day real estate life, I feel it is imperative to be "all over" this subject.   


angel vs devilWhat I have learned, after spending lots of money and time, I am somewhat reluctant to share.  You see, I consider most of you to be my competition and I am human, which means I am falible and greedy (let's be honest we all are!!) and the devil on my left shoulder says "keep this knowledge for yourself."   Then I am reminded of the teachings of my coaches, mastermind groups and other angels on my right shoulder who say, "if you want to become the best possible person you can and you want the finer things in life you must practice the art of abundance and reciprocity regularly."   For those of you who don't know what that means, It means in order to get you must give and do unto others as you would have others to do unto you.   Plus, honestly, unless I had someone who was willing to share their knowledge with me, I would not know what I now know.  So, brace yourself because I am going to spill the beans about one of the most important subjects facing real estate today and the foreseeable future.  I am going to be blunt, so if you have a weak stomach or don't like constructive criticism then you should move on to the next blog.

By law, us real estate agents are supposed to have an in depth knowledge of the transactions we are involved in or we are, at the very least, misrepresenting. It has been appalling to me to see and read the comments of my 'real estate brethren' post comments or write blogs about this subject when they obviously have no idea what they are talking about and have not spent the time to actually research, read and learn about the subject they are writting about.  It's no wonder why the general public has a bad view of real estate agents and love to diminish and devalue our profession.  If you ask me, we do a pretty good job of doing that to ourselves.  I hate to generalize but the 80/20 rule in real estate is accurate for a reason.  80% of us are floating in the breeze praying for the next "sale" to hit them over the head and may practice real estate but in no way treat it like the business it is or like they should.  When it comes to short sale transactions I think it is more like a 95/5 rule.  So, before I go into the meat of this blog do yourself and all of the distressed home owners out there a favor and either buy a clue and really commit yourself to learning and understanding short sales or do the right thing and refer them to someone who does.   By the way, this includes you realtors out there who take a short sale listing only to pass on the negotiations with the lender (the most important part) to a third party.  I must admit I was one of those at one time until I learned the error in my ways the hard way.  Unless you are referring those negotiations out to an attorney who is local to you. And it is one who actually knows and understands short sales intimately themselves (few and far in between), this is one of the biggest mistakes you can make.  But I digress as short sale negotiations in house vs referred out is a debate for another day.  

short sale help buttonLet's get on with the Flip or Back to Back Transactions are legal or illegal debate.  

Are you ready??..............

They are legal, so legal that Wells Fargo and Freddie Mac have both recently released updated and specific guidelines that say so.  Don't believe me??

See for yourself (this is the part where you actually have to take the time to research, learn, read and oh yeah comprehend what you are reading!!!!)

Wells Fargo Guidelines

Freddie Mac Guidelines

So legal that there are a bunch of lenders out there who will fund both the A-B and B-C transactions and title companies who will insure both transactions!

So legal that myself along with a host of top notch investors, attorneys, real estate agents and title companies have been and are doing hundreds, of these transactions and have been doing them for much longer than one year and on a national level!!   

So legal that our contracts and addenda have been scrutinized by attorneys, lenders, title companies, TRENDMLS and the Pennsylvania Real Estate Commissions legal hotline attorneys and all have given the green light!

So legal that....well, I'm sure you get the idea.

house money

How could this be, you ask?  I've been at seminars where the speakers said they were illegal.  Well, it's all about disclosure and transparency.

Are there illegal flips and back to back closings taking place?  

Absolutely and unfortunately they are occurring everyday.  Some do it unknowingly do to lack of knowledge and understanding while some do it purposely because they are scam artists.  They all should pay and they should and probably will pay dearly for their actions.  

Remember your real estate 101, not knowing is not an excuse.  If you don't know then don't take on the client or the deal.

The question is, Do you want to be one of the 5% of agents out there who understand how to construct and navigate the short sale jungle and prosper because of it?


Do you want to continue to be one of the 95% who just don't "get it" and never will because you won't take the time or spend the money to learn even though that is the oath you took when you became a Realtor?




Disclaimer: While attempts have been made to verify information provided therein, the author does not assume any responsibility for errors, omissions, or contradictory information contained in this document. This document is not intended as legal, investment or accounting advice. The reader of this blog assumes all responsibility for the use of these materials and information.  


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Comment balloon 32 commentsKevin Kravcak • January 08 2010 06:09PM


Well, this may become a mote point with the HAFA short sale 90 day before resale clause that will be part of every short sale done under the HAFA program.

But I agree, they are legal and I applaud you for educating others.  I wish there were more people out there who took their responsibility to represent their client to the best of their abilities more seriously!

But now I will disagree with one item in your blog.  It is not a mistake to outsource your negotiation to an experienced and diligent 3rd party (like me).  It is a specialty and one a company won't don't last long in, if we don't produce results that keep our client's with us.  And it allows you to focus on getting listings,marketing properties and getting offers.  That way you can serve more distressed sellers that need your expertise!

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago


Posted by Tom Brintzenhofe (Exit Diamond Realty) almost 11 years ago


Posted by Tom Brintzenhofe (Exit Diamond Realty) almost 11 years ago

Dawn, no offense but sounds like you need to read up on HAFA.  Similar to loan mods, it is a joke an dmore than one congressman has already testified saying so.  Why do you think Wells and Freddie have already changed their guidelines, they know these deals are legal and needed to help get us out of this mess.  As for the negotiating, that blog is coming.  Let's just say we agree to disagree.  I learned the hard way.  I do think there are some good companies out there but IMHO there is nothing better than having your own employees who you can oversee and hold accountable.  I realize most realtors are not in a position to do so but that is one more reason why they should not take on a short sale client.  If they do not have the time or resources to perform their duty with full knowledge and oversight of the process.


Tom,  Hostile? no. Strong? yes.  In theory, you are correct, in reality I have never seen it happen (knock on wood) for a few reasons.   Have you ever heard of a hard deposit?  The end user needs 20% down, the deposit money is there.   Plus, most end user buyers are cash investors themselves.  And if that situation ever did occur, the investors I deal with have access to the cash in order to hold if necessary.  Again it comes down to knowing and understanding how to set these up and keep them together.  At the end of the day, if the deal is strong enough of the front end, there is plenty of cash on the street, you just have to know where to find it.

Posted by Kevin Kravcak (Realty Mark Nexus) almost 11 years ago

a few more counter points....Dawn, the HAFA contract is not in the sellers best interest and no one is required to sign it, anyone and everyone can opt out of HAFA.  I predict there will be many more non HAFA deals than HAFA deals once people actually read and understand what it is.


Tom, you could make the case on every deal you do whether it is a short sale flip, just plain short sale or regular old transaction, If the buyer wants to walk they walk.  If you have a substantial hard deposit and you communicate and navigate well enough with total transparency to all parties, your concern becomes a moot point.  (again, knock on wood).  Everyone involved knows and understands the consequences.  At the end of the day, it's a great deal for everyone involved, so why would they walk?

Posted by Kevin Kravcak (Realty Mark Nexus) almost 11 years ago

Kevin - In my defense, I have read the entire Supplemental Directive 09/09, multiple times and am well versed in what it says... page 6 states

While servicers may amend the terms of the SSA(Short Sale Approval) in accordance with investor requirements, applicable laws or local real estate practice, at a minimum the SSA must include the following: 

Now I jump to the first item on page 7...Notice that the sale must represent an arm's length transaction and that the purchaser may not sell the property within 90 calendar days of closing.   

I understand that Freddie has changed their guidelines but the HAFA program only applies to Non-GSE mortgages.

 If I am misunderstanding this please educate me.  I am always looking to be educated!!

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

Another question - a seller can OPT out of the the HAFA program even if their servicer has contracted to participate in the program?

And I will agree with you, I also believe it is a joke and will not produce as promised.  Its guidelines have serious problems in that they conflict with state law in many states by taking away the right to pursue deficiency's for junior lien holders.

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

It is late here in Wisconsin, but as I sit at my desk watching the snow fly I decided to address one other statement you made...but IMHO there is nothing better than having your own employees who you can oversee and hold accountable. 

I am the employee of those companies and individuals that use my company's services.  And I am highly accountable.  My company shares our information and contact log for each file with the client, and it is available 24/7 for your perusal.  All calls, submissions and any kind of contact with servicers, title company, seller, buyer and subsequent agents are logged in real time. You will know who we spoke to, when we spoke to them, who on my staff was the contact, and what transpired.  You can also note the files yourself, with questions, comments or suggestions.  So in essence you can oversee us to whatever extent you choose. 

We have been doing this for 8 years and all my clients except one have been very happy.  I am like you..passionate about what I do.  Our job doesn't end until the sale is recorded. 

Good Night Kevin


Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

Hi Dawn,

I know there are good companies out there and I'm sure yours is one of them.  There may be cases where using a private negotiating company may work but imho only if they are local to you, have a track record and communicate freely.   To me this is a second option, the first option and best is to have your own people who work in the same office as you where you can be 100% sure they continually attend training and can speak with any of them on a moments notice and provide minute by minute oversight while knowing they are working on your files and your files only.  There is no question where my files are in the pecking order as my files are always the top priority because there are no other files, just my brokerages.  You can't say that about an outside source where it is possible they are working on 15 different files from fifteen different brokerages, at a minimum.    Although not in your best interest, you can't deny that is a better way to go if the resources are available. I realize that is a BIG if.  No doubt there is a need for your companies services but IMHO they should be used only as a backup, not as a first option.  Not to mention the extra revenue that is generated by doing it "in-house".  At the end of the day, there is room for all of us as there is certainly a need of good quality people and companies who understand what is going on and are needed to help us all get out of the mess.


As for HAFA,  I don't question what is says, you are correct if you go HAFA, it's 90 days, can't get around it, the contract is what it is. That being said it is not going to stop cash buyers from doing flips as there are legal ways to have settlement by day 97 just like FHA end user deals.    Again, it's a joke and I don't even want to get started about how unconstitutional it is for the old lender who is accepting a payoff to tell any buyer, whether an investor or not, what they can and can't do with a property in the future.  Title companies can't insure that, no one can.  What happens if a regular couple buys a HAFA short and then divorces or loses a job or some other unforeseen action that forces them to sell prior to 90 days?   It sickens me.

And yes it does not matter if the lender has signed on with HAFA, it is the owner/sellers choice to opt in or out. They can simply state on their hardship letter or cover letter in the package "seller requests this is to be a non HAFA short sale".  This is according to some high level attorneys who I have access to that have been on top of the rules and regs from the beginning of this mess.   It appears like you've read the thing, it's a terrible contract for the seller, wonderful for the lenders.  Gee, who would have guessed it.

I wish you well Dawn, keep on doing what you do and keep the faith!!

Posted by kevin Kravcak almost 11 years ago

Thank you for the information about the seller being able to opt out of the HAFA short sale.  I have been attempting to find some supporting documentation but have been unable to locate it.  Please share the link if you have one.  You are blessed to have the resources of high level attorneys, thanks for sharing.

And yes, if you have the resources to have a well trained staff in house you would have no need of a company like mine.  However, a company like mine can be invaluable to those not blessed with an in house short sale department.

However before you work with any company it is your responsibility to do your due diligence and check them out.  Check with the BBB - even if they aren't a member, they will still have record of complaints against them.  If they are clean or have positively resolved issues,  ask for references.  And actually call them.  Get the name of a seller, buyer, Realtor and Title Company they have worked with recently.  Each of these references can shed light on a different aspect of the short sale companies services. Then finally make sure you have a clear understanding of what you expect from them and what they will do for you.  Always make sure that the person you talked to when you entered into the contract will continue to be available to you throughout the process.

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

here you go,

If the borrower fails to contact the servicer within the timeframe or at any time indicates that he or she is not interested in these options, the servicer has no further obligation to extend a HAFA offer. 

this is part of the supplemental directive issued on Nov.30, 2009

you will also see the owner can submit an offer under HAFA without signing the SSA, as an alternative, which is what I would recommend if the client wanted to try a HAFA short as there are way too many things in that contract I would not be comfortable with if I were the homeowner in distress.

Here is a link to Freddie guidelines

good luck!

Posted by Kevin Kravcak (Realty Mark Nexus) almost 11 years ago

My understanding of the sentence you have underlined is that this it is not an opt out, but a refusal of options or failure to contact that escalates the foreclosure sale, and is not in the borrowers best interest! This is very dangerous if your property has an eminent sale date.  Servicers who have contracted under HAMP/HAFA must offer the short sale option prior to foreclosure sale.  

Page 4 Supplemental Directive 09/09....If the servicer determines that a borrower is eligible for a HAFA offer based on its written policy and this Supplemental Directive, the servicer must follow the steps below to determine if a short sale or DIL offer will be extended.

If the servicer has not already discussed a short sale or DIL with the borrower, the servicer must proactively notify the borrower in writing of the availability of these options and allow the borrower 14 calendar days from the date of the notification to contact the servicer by verbal or written communication and request consideration under HAFA.

As soon as the borrower refuses the offer they can proceed with the sale. What is so nefarious is that if the borrower has previously discussed the short sale or DIL option the servicer may offer the option verbally to the borrower and if the borrower indicates they don't want to participate, or even more devious, a message (voicemail) is left that they are being offered this option, please return a call by XX date, and they don't call back -it is considered a refusal.

Note the link you put in in your response is to Guidelines Aiming To Ease Short Sales  By Ruth Simon, The Wall Street Journal  - not the supplemental directive.

I am sure you meant to put this link .......

The second reference is to the option that you can submit an offer with an Alternative RSSA (Request for short sale approval) if you have not participated in the HAFA preapproval for short sale program and have not received the RSSA that is pre-populated with the minimal acceptable net proceeds from an offer along with allowable transaction costs that they have preapproved for payment. But you would need an offer that was fully executed prior to the borrower having been either contacted by or in contact with the servicer....

Excerpt page 6 of Supplemental Directive..  In the event that a borrower has an executed sales contract and requests the servicer to approve a short sale under HAFA before an SSA has been executed, the servicer must evaluate the borrower for HAFA as described in this Supplemental Directive and must utilize the Alternative Request for Approval of a Short Sale (Alternative RASS).  There is more information on the Alternative RASS on page 8 of the directive.

Again, the Freddie guidelines have nothing to do with the HAMP/HAFA programs - the programs are for Non GSE mortgages.  However I do appreciate the link.

I am enjoying this post and the debate of the Supplemental Directive 09/09.  To paraphrase your comment in #4, No offense Kevin, but maybe you need to read up on HAFA. ;)             

Thank you for a mentally stimulating exchange.  

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

We can go back and forth forever on this but I'll maintain Lenders may be obligated to offer HAFA but HO's are not obligated to enter into HAFA.  

Back to the original topic, Flips are here to stay HAFA will not make them go away as it will only effect a small portion of loans and home owners.

I did mean to include that link, not sure what happened there.    

In PA, foreclosure takes about a year or so, at least, that leaves plenty of time to work a short sale even if the lender does not stop the foreclosure process. As you stated earlier, individual state laws have to be considered.   Having a working relationship with private equity firms and lenders I know first hand, at the end of the day, lenders do not want to be owners.  If you provide them with an agreement of sale with an acceptable price they will approve it HAFA or non HAFA.

and touche, but I have read it a few times myself as well and I guess just interpreted things a bit different than you plus I take into account PA law.  To be honest, I rely on my attorneys and their point of view on it more than my own as the thing is not an easy read at all and that's what I pay them for.

I too am enjoying the conversation on HAFA even though it is not the original topic at hand.......gosh, we are geeks aren't

Posted by Kevin Kravcak (Realty Mark Nexus) almost 11 years ago

I am glad that flips are here to stay!  Alot of my clients are investors, and I would hate to lose their business.  Enjoyed the conversation greatly.  If I am ever contacted by a homeowner in PA I will contact you about listing the property.  But you would have to work with my company LOL ;).

Have a great weekend!

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago

Thank goodness that FHA has decided to pull there heads out for at least a year to allow FHA mortgages on "flip" properties. This is not to say there won't be plenty of restrictions to come along with this new, yet exciting change.

Posted by Brandon Joaquin (Re/Max Executive) almost 11 years ago

Kevin is correct! 

HAFA is a JOKE and does not help the seller. All agents need to really read up on this, because it is not good.

And for Tom B., if it wasn't for us investors and having access to transactional funding and getting these short sales negotiated and sold there would be even more sellers with foreclosures.

Our group has been performing Short Sales for over 6 years, when no one new what they were. This year is going to be overwhelming for sellers and short sales are going to be their answer. Most won't be able  do a loan modification and can't afford to bring  back payments to current.

We can help seller's that has to sell their property and avoid foreclosure. We get 94% satisfaction of liens for the sellers. We do all the negotiations with the lenders, so the agents can spend their time wisely getting more listings and buyers.

We are Nationwide! RC Real Estate Solutions at

Posted by Rick Cauthon almost 11 years ago

Rick -

I have been doing short sales for 8 years and have a similar sucess rate.  I agree HAFA sucks.  What I want to know there a way for a HO to opt out of a HAFA short sale if the lender/servicer is participating in HAMP/HAFA?   Kevin thinks so but I have not seen anything that indicates this is true.

Also what are straight flippers going to do to withthe 90 hold required by HAFA?

Posted by Dawn Uselding, Short Sale Assistant (A New Dawn Real Estate Services, LLC) almost 11 years ago


There are VERY ATTRACTIVE SPREADS &  and as little risk as any Liquid Investor would dare to RISK.

The Southeastern Tn & N. GA areas need 60 to 90 day transactional funding. This timeframe give or take a month give time for BOTH repairs & Loan TurnTime. I happened upon Transactional Funding thru trial, error and Losing a Great Deal with an end buyer.  The "Investor" misrepresented himself as Principal investor (more than one mind you) when using trans funds but did not disclose.  Therefore, the endbuyers that are already in place. (About 30 or so different tenants/properties only qualified FHA). The appraisals require repairs to move forward in the loan process. 

I am aware Transactional Funding is Legal but when improperly disclosed.  And the ingredients for trans funding w/immediate endbuyer is NOT there.  IT DOES NOT WORK but the Unsuspecting loan officers, realtors, and sellers MINDS are WORKED OVER in the Process!!

Can be a Great Opportunity for some but MOST in my area are either HUSH HUSH.  Or just now getting the hang of how it works.   MAJOR NEED FOR EXTENDED TRANS FUNDS as MOST pre-foreclosures are in need of repair or EVEN vandalised but REALLY GOOD DEALS. 

Please advise TIme is of Essence in one that I've worked hardest on.

Best Regards,



Posted by Evette almost 11 years ago

Brandon - Sure, there will be and are guidelines, but something is better than nothing!!

Rick - Keep up the good work, sellers need you!

Hi Evette -  Yes that could be a potential problem when dealing with novice investors who have no financial backing other than the transactional funding and very little to no experience with these deals.    There's always more than one way to skin a cat and most fly-by-night short sale investors think their only exit plan is to use transactional funding.   In a very worse case scenario, they need to back out of the deal and let it go A-C so foreclosure is avoided and the C buyer still gets the house they want at a great price!!  See my blog for tips to be sure you ask an investor or any agent who represents an investor before moving forward with a short sale!!!    Lot's of wanna-be, Johnny come latelys out there who are neither experienced enough or prepared to adapt when something goes awry.   Bottom line, if you are greedy and are only in the short sale flip game for the money, you need to be doing something else. People's lives and credit are at stake and that should not be something that is overlooked, ignored or taken lightly.   Goal #1 always, ALWAYS has to be stopping foreclosure, even if it means the investor has to back out of the deal and make no money!     You win some and you lose some, at the end of the day, money will be made but only for those who are in it for the right reasons.

A true investor will also have access to funds other than transactional funding.  Including private money and hard money.  Any investor who only has one exit plan is not a very good investor at all and I would be very wary of such investors!!!   How do you know if they are experienced or not??   ASK QUESTIONS!!   This is also another reason why it is best to have an agent involved who actually understands this process even better than the investor buyer.  IMHO, as an agent, no way would I want an investor/negotiator team who I have never worked with before "control" these deals without showing me some kind of personal track record of success, at the very least.  Even then I would not allow it, I'm the one with a license,career, reputation and livelihood on the line, not the investor!! To many speculators out there who bought a "short sale investment course" but really have no practical experience and can't be trusted.   If an agent is going to be involved they should know and understand the process themselves or they shouldn't get involved at all.  Think about it, a licensed agent allowing an investor (their client) to control every aspect of the deal??   That is not what being an agent is all about.  We are supposed to be the experts, not our clients!!   My investor clients know this and appreciate the fact I am just as knowledgeable, if not more knowledgeable than they are. At the very least we learn from each other, doesn't that make more sense?


Dawn - HAFA is entered into through the signing of a contract and like any other contract is not enforceable unless it is signed, sealed and delivered!!!  That is common contract law, there does not need to be, and I'm sure lenders and our illustrious government will not ever include, specific language that states so in any document they create regarding HAFA.  That does not mean the law does not apply, it just means they are not going to broadcast it out to the masses. 


Thanks for all your comments!!




Posted by Kevin Kravcak almost 11 years ago


Are you licensed to do business in TN or GA??  If so, I believe there is quite a bit of good business and give peace of mind to many good people.  Who have been jerked around by the banking industry, place their faith in the investors only to fail there also. 

REAL Investors needed in the deals but MUST SHOW:LIQUIDITY.....LIQUIDITY.......LIQUIDITY......

Please let me know whether there are some that may be interested in our area. Primarily TN but North Ga also.  15% to 24% pursuant to Usary Laws in state of TN AVAILABLE on their short term investment.  LENDER APPROVAL not Mtg Broker approval letter (With all Due Respect) AVAILABLE on a couple endbuyers.  Bank approvals for 2 others but MUST MAKE Repair and the Seller can not get credit, does NOT have the capital, and does not have the clout to have worked done and paid at closing.

I have taken heed your message for proper Proof of Funds NOT Transactional FUNDING letter.    I gotta get back at it.  I will look at the blog you mentioned this evening.


Currently researching other strategies with regard to principal reduction??, Mortgage Purge??, etc.   Lots of people out here some scamming and some on the level.  Some validity in principal reduction concerning proper assignment, etc. but does NOT mean BANKs Have to agree to shortsale terms. But may give a little leverage.  If you've experienced success where this program is concerned.  Please advise me.  Otherwise, I will update as I can in that regard.

Thank You All,

Posted by Evette Savage almost 11 years ago

Evette - contact me via e-mail with your contact information and I will get back to you to discuss the opportunities in GA and TN.  Investors don't necessarily have to show liquidity and transactional funding is NOT a totally bad way to go.  More important is you definitely want to see a track record of success and they should have more than one exit strategy in case they get a 30 day anti flip approval letter!  What is their plan gong to be if that occurs?    What is their plan going to be if the C buyer backs out?  Will they be in a position to buy it anyway?   E-mail me and I'll help you with all the stuff you asked about!!



Posted by Kevin Kravcak (Realty Mark Nexus) almost 11 years ago

We're in the 5%...and foraging forward because of it. I'm excited about HAFA as well. THanks for the post!

Posted by Tracy Royce, Royce of Real Estate - Short Sale Arizona (Short Sale Arizona, Arizona Short Sale Realtor) almost 11 years ago

This is a good back and forth on the subject.  Very little mention of the initial customer and how they are properly taken care of...but a good dialog.

Posted by Robert Earl -The Earl of St Pete, The Earl of St. Pete (St Pete LUXE Living Group) over 10 years ago


thanks for the feedback, you just gave me an idea for another topic.   This subject was on legal vs not.    Benefits for the seller vs risks is another subject entirely.  stay tuned.

Posted by kevin Kravcak over 10 years ago


Great points, I'm glad Real Estate Agents are gaining clarity on the legalities of these processes, we are in North Dallas, and have helped many sellers here and all the agents who bring us deals love the ability to have a buyer willing to stay in the game and even handle the process no matter how long the bank takes.

We close 80% plus of our transactions, and the question of an investor buyer backing out because there is no end buyer, in reality is no different than the likelihood of the transaction completing in the first place, unless they have no marketing effort going into the back end selling efforts. 

The typical reason for an investor not moving forward has more to do with the BPO evaluation and less to do with there genuine intention to purchase the property.  Real Short Sale Investing Experts can be a huge assets to Real Estate Agents.

Some keys to weed out not so savvy investors, ask for proof, like HUD's.  And more than just 1 in the last 4 months.  Second, ask them what they will do if the bank gives a real shallow discount, a good investor should still know how to get the deal done.  We are willing to make no money and get the short sale done if that was the only way to do so, and we get verbal agreement with our agents likewise.  Both of our reputations and the chance to save someone from foreclosure, and get a future referral is worth more than making all the effort and just letting a deal die.

Use your gut, and you'll find us out there.  My agents are making a killing on short sales with me as there buyer, and they have much less work involved, I hope more agents can find groups like us. A ton more lives will be helped.

Regarding HAFA... well read closely there are some real concerns there.  Don't want to burst anyones bubble, but take a look if you care to know why HAFA's might not really be the best solution for your sellers -

Good luck to all investors and agents alike, lets help turn this market around together.


Posted by Matthew over 10 years ago

This was...amazingly educational.  Thanks to everyone who made this such a great discussion, especially Kevin and Dawn!

Posted by Justin Boland (Back Brain Media) over 10 years ago

This is for Tom at Exit Realty.  Tom, I understand your concern about nothing holding the investor to the deal, but what makes that different from ANY BUYER THAT WALKS before the short sale is approved. ..or even after approval??  I had an agent call me last week that had a two family go to foreclosure because over the period of 18 months trying to get this sucker sold, he had THREE buyers walk!!  Now none were investors.  The same risk for the seller is there whether it's an investor or just a regular home buyer.  If they walk they walk.

Sorry, but I've encountered agents saying that to me before.  There is no difference between an investor or regular home buyer if either chooses to walk.

Posted by Mary Vega over 10 years ago

Lenders continue to change Short Sale requirements, processes and timelines it seems like weekly if not more frequently!

Posted by Tony and Suzanne Marriott, Associate Brokers, Haven Express @ Keller Williams Arizona Realty (Serving the Greater Phoenix and Scottsdale Metropolitan Area) over 10 years ago

I am a Realtor in So Cal with a few new investor clients from an investor association.  They want to do back to back closings, but I don't have a good title/escrow that will do this.  My Broker says they are illegal and he owns an escrow company, so i will have to look elsewhere.  He says we have to close an escrow before we can open another one on the same property.

Your articles above give me a smile - there's hope!  But I may have to sever relationships with my Broker unless I do it his way.  Can you send me in the right direction to find title/escrow in Southern California that will do a back to back closing (on the same property)?  It can be a few days between, but certainly not a 30-60-or 90 day wait!


Posted by Connie Gohata (REMAX College Park) about 10 years ago

Awesome blog. It should have been a feature. I am also sick of people stating that short sale flips are illegal. Great conversations all around as well.

Finally, I process short sales for other agents. I can understand your concerns, however, one of my clients is a savvy short sale agent who decided to outsource the short sales to leverage his time, especially since our services are free. So if you can find someone who gives it the same attention and knowledge as you do, then there should be no issues with outsourcing. After reading Dawn's responses, I consider her as a sister in the family of short sales!

Posted by Satar Naghshineh (Satar - Amiri Property and Financial Services Corp.) about 10 years ago

Thanks for the info and all of the discussion and comments from others.

Posted by Dave Whittington - Ocean City, MD REALTOR, Associate Broker (Associate Broker - Coastal Life Realty Group) almost 10 years ago

With full disclosure, among other things, a short sale fip is not necessary illegal. But there are a lot of scammers who took advantage of this so colled AB-BC transaction( especially using an option agreement). The legal problems can be: 

mortgage fraud, false statements about the condition or price of the property and other terms of a AB transaction, breach of duties for realtors who intentionally misrepresent their clients, etc. , and of course, the A seller compensation and intentional misrepresentation of property and other terms.


Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) almost 3 years ago