Commonwealth of Virginia's Wet Settlement Act and Same Day Flips
This is a great look at the Commonwealth of Virginia's Wet Settlement Act. It's a bit complicated to read, but any Realtor practicing in Virginia should be well acquainted with it.
The Commonwealth of Virginia has a Wet Settlement Act. What is of critical importance in the wet settlement act is the duty of the Settlement Agent. Here is how the code defines the duty of the Settlement Agent:
The settlement agent shall cause recordation of the deed, the deed of trust, or mortgage, or other documents required to be recorded and shall cause disbursement of settlement proceeds within two business days of settlement. A settlement agent may not disburse any or all loan funds or other funds coming into its possession prior to the recordation of any instrument, except (i) funds received which are overpayments to be returned to the provider of such funds, (ii) funds necessary to effect the recordation of instruments, or (iii) funds which the provider has by separate written instrument directed to be disbursed prior to recordation of any instrument. Additionally, in any transaction involving the purchase or sale of an interest in residential real property, the
settlement agent shall provide notification to the purchaser of the availability of owner's title insurance as required under � 38.2-4616.
When it comes to folks who would like to sell properties the same day they buy them, what this means is that if you are going to purchase Property in the Commonwealth of Virginia, you must pay for it yourself BEFORE you collect funds to sell it.
You see, if B is going to buy a Property from A for $100,000, then sell it to C the same day for $150,000, B can not pay A using C's money. That is a violation of the Wet Settlement Act. Why? C's money can not be disbursed until C's deed is recorded. And you can't record C's deed unless B's deed was recorded.
Bottomline: You have to use your own money to puchase real estate if conducting a same day flip.
For more information on Virginia's Wet Settlement Act, please click the link.
Chris Ann Cleland, Realtor- Licensed in Virginia, GRI, SFR, Northern Virginia Short Sale Specialist. Affiliated with Long & Foster, 7526 Limestone Drive, Gainesville, VA 20155. To contact Chris Ann, call 703-402-0037 or email chrisann@LNF.com.
Comments (0)Subscribe to CommentsComment