Negotiating Short Sale with Option Contracts

[Account Closed]

I'm about to start flipping short sales with option contracts. Does anyone have any general tips and advice? I've been told that many banks are opposed to it because they prefer to sell the house at the price the investor is flipping it to the end buyer. I've noticed that negotiating shorts without options contract has been difficult with banks that have received bailout money. Should I expect to run into this problem with options contracts? I would appreciate it if anyone can refer me to any articles or websites that discuss the matter.

[Scott Hubbard]

Using an option contract can cause issues with some lenders or servicers, but they are still accepted by most of them.

One of the guidelines recently published by Freddie Mac which is used by servicers to evaluate a potential short sale advises the use of option contracts as a red flag becuase it smells real estate investor.

I like option contracts myself, but they are not widely accepted by Brokers, REALTORS and MLS associations. So, I advise you to meet with your agents on your team to see if there are any potential problems with using an option.

Actually, it is not so important to use the option contract itself, but is more importnat to use the verbiage where the seller grants certain rights to the buyer to market the property while negotiating the short sale.

This verbiage can actually be used in any standard purchase agreement including REALTOR contracts.

So, I still use option contracts mainly becuase they work well in my market. However, you will need to do your own legwork to see if they are accepted in yours especially if your planning on flipping using the MLS. I would worry less about