Have you ever represented a buyer on a property that’s an entity and not an individual? Have you ever represented a Corporation, an LLC, or a Trust? Sometimes, in short sales, representing an entity is not so easy. That’s because the short sale lender wants to know who owns the entity in order to ascertain that this is not a fraudulent purchase, according to the short sale lender’s terms and conditions.
In fact, some short sale investors/note holders are so concerned about entities purchasing short sales that they have created guidelines that prohibit such a purchase.
At Bank of America, they have specific documents that are required for such a purchase. Of course, if the required documents are not provided, the short sale could be delayed or canceled.
LLC Required Documents: If the buyer is an LLC, the following documentation must be provided:
- Fully executed Articles of Incorporation / Organization and Operation Agreement (contains Members Agreement which lists Officers and their ownership interest in the company)
- Proof of funds in the LLC’s name
- Proof of the buyer’s connection to the LLC
- If the LLC members are Trusts, then copies of the Trusts will be required.
Corporation Required Documents: if the buyer is a Corporation, the following documentation must be provided:
- Copy of Articles of Incorporation
- List of Shareholders and Officers
- Proof of funds in the Corporation’s name
- Proof of buyer’s connection to the Corporation
So, the next time you receive a short sale offer where the buyer is an entity, don’t forget that you will need to obtain the appropriate additional documents as well.