Does anyone know if seller side only Hud is legal in Kentucky?

Question

Hello, I was just introduced to the concept and I was wondering if this is legal in Kentucky and if anyone has used it? Any info would be greatly appreciated, Thanks!

Phil Pustejovsky · Answer

A Seller Side Only Closing Statement and a separate Buyer Side Only Closing Statement, or what I call a "Blind HUD" is not a matter of legality.

When the new buyer is getting a loan however, in most cases, the underwriters for that lender will almost never allow a Blind HUD closing. Also, if the seller and the buyer have separate closing attorneys, sometimes one or both will demand to see the other side's expenses.

But, if the new buyer is paying all cash and there aren't a bunch of attorneys involved in the closing, having a Seller Side Only  HUD and a Buyer Side Only HUD can be done if you are working with a  knowledgeable, investor friendly closing company.

The beauty of the Blind HUD closing is that the seller doesn't see the assignment fee you're making, which can be very helpful, as in the time I was threatened to be shot and killed if the seller ever found out where I lived once he found out from the Prelim HUD what my assignment fee was on the deal. Good thing he never found out my personal residence!

But, keep in mind that with a Blind HUD closing, the new investor buyer you are assigning your deal to will know how much you are making.

If you don't want either party to know how much you are making, the tried and true way to solve that issue is to do two separate closings.

Jay Johnson · Answer

Thanks, Greg.

Thanks, Phil Pustejovsky, for coming on and giving us that great information. Your videos have been, extremely, helpful. Thank you for all the information you give.

For some reason, I can't tag from my phone, I have to be at my desktop. I can only tag if I "quote" from my phone. Anyway, thanks, Greg and Phil.

Greg Hammond · Answer

Yes @Jay Johnsonthat's it exactly! I have found a great title attorney here in town that will take care of everything, now I just need to find more deals! My paperwork is from Freedom Mentor (Phil's course) and it explains everything.  I think the seller was just so excited to get rid of the property he wasn't paying attention. Get out there and find the deals! I was inactive and nervous but now I'm hooked. The problem is people see a value on a site like Zillow and think their's is worth the "Zestimate". That is almost NEVER the case! If they're not truly motivated, you're wasting your time. Good luck!

Jay Johnson · Answer

Glad it closed for you!

I haven't done a deal, yet, but I have a clause in my contract that states that if I assign this contract, I may make a profit which is substantial. That way, when they see it, they can't say I didn't tell them because they have to sign-off on that clause itself. Still, I saw, Phil Pustejovsky, say he told the seller exactly what he was doing, and the seller still got mad after he found out how much he made.

What does it mean to have your attorney do the closing? Does that mean you take the paperwork to the attorney, don't come to the closing and wait for the attorney to call you to pick up your check, or is it an altogether different process? I don't plan to come to any assignment closings, my attorney said I didn't have to. If I have been bought out of the deal, then there's no reason for me to be there. Is that what you're talking about when you say the investor you know has his attorney to do all his closings?

Keep closing deals!

Greg Hammond · Answer

@Jay Johnson The deal still closed but he didn't understand the $3500 assignment fee. Good thing was he had this house vacant for 4 years with no income and wanted out of it pretty badly. It was my first wholesale and I learned a lot for sure. I wasn't trying to be deceitful at all but he thought I was. I was actually planning on fixing it up but I had another investor offer me more before I closed. I know another investor that lets his attorney do all his closings, I think I may go that route in the future lol. They make wholesaling seem so easy on the videos I've seen but most don't bring up the fact that it ticks people off if they see what the assignor is making. Good luck to you

Jay Johnson · Answer

@Greg Hammond did the deal still close? If you don't mind me asking, what was your assignment fee, and what did he do or say when he saw it? Didn't he know you were assigning your contract for a profit before he got to closing.

Greg Hammond · Answer

I was just looking for a way to close a wholesaling deal where I didn't have to have both parties present at the same time. The last close I did the seller was a little ticked off when he saw my assignment fee. Thanks for the info guys!

Russell Brazil · Answer

@Greg Hammond it will be a moot point pretty soon as the HUD-1 is disappearing come October.

Sean Williams · Answer

@Greg Hammond this is a question for the attorney, but if you only have 1 party on the HUD then what is the purpose of the HUD? Is someone purchasing the property from the seller?...why else would you be using a closing statement unless the property was being transferred/sold?

Does anyone know if seller side only Hud is legal in Kentucky?

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