So you got your deal, you have negotiate it with the bank, and You receive the fax that your short sale have been approved, and the bank gives you 30 days to close. So what is next, by now you should already have an end buyer, which is someone who will purchase the property from you at closing.

Note( Most transaction funding Co interest can range from 2% to 5%) Do not do anything higher than 5%

Let’s look at this scenario:

You have an approved short sale letter from the bank for $195,000.

You have an end buyer in line to buy the property from you for $220,000.

Like most short seller you do not have $195,000 to perform the first closing, which is where you buy the property and the bank receive their $195,000 check.

That is when the transaction funding company comes in hand, the way it works, the funding person will be in communication with your closing attorney or Title Company, after the transaction funding firm receive the form require from you: P&S between you and the Seller, the bank short sale approval letter, P&S between you and the end buyer. The funding company will wire the fund to your title agent or lawyer with instructions and guidelines.

Note: The funding company money is usually out for a few hours, so both closing must be schedule for the same day, but different hours, in most cases you must close with the bank first.

So this is a typical double closing using a Transaction funding company.

First Closing at 10: 00 AM, funding company wire $195,000 to your title agent,

Agent wire the $195,000 to the bank

Your second closing happen at 2:00 PM your end buyer get a loan for $220,000 to buy the property from you, so the closing is done, so your agent wire $195,000 + 5%(9,750) of it so a total of $204,750 back to the Transaction funding firm.
The remaining balance of $15,250 is your profit minus the closing cost.

Remember that you should always have an exit strategy upon finding a home, make sure you do your due diligence and come up with the best way to get rid of the property and make your profit, and move on to the next short sale deal.

To Learn more about Short Sales and Transaction funding visit http://www.shortsalesedu.info to download our free e-book