Assign/Concurrent Close Please Advise
Hello. I wanted to know what was best to assign a contract or to do a concurrent close?
If I have a deal that was appraised at $1.5 Million and owner is willing to take $1Million, I would want $100,000 and the end-buyer would have $400,000 of instant equity. Would it be best to do a concurrent close or an assignment?
When I do my Purchase Agreement do I need to leave money down to bind the contract?
If you are knowledgeable in this area I ask that you would please not leave this topic with out posting your comment. Thanks
Chakib,
My preference is always in favor of the assignment. It is much cleaner. All you need to do is to make sure it is a good deal for your buyer. In this situation, you risk your buyer trying to negotiate a lower assignment fee. Let me ask you. With the time you put into it, would accepting a 50K fee be a terrible thing?
Yes you do need earnest money to bind the contract.
Good luck.
P.S. Just on another note, where is the property located?[ Edited by bnorton on Date 10/18/2004 ]
Thanks a ton! The Property is in Georgia
Ah. Too bad. I was hoping it was in PA.
You are welcome.
No its in GA, but that's funny because I live in PA alos. Why were you hoping PA???
I invest in MD and PA.
where in GA is the property located?
Hello bnorton,
I heard that a promissary note will bind a contract as well is that true?
And in regards to Murphyj2000, why would you want to know were in GA the home is located? Are you trying to STEAL my deal? Well you can't because she signed the contract today. Ah ha!
No just kidding, she did sign the contract but it's located on the outskirts of Atlanta :-D
Ha Ha.....No, I' m not one of those investors. I was just wondering what county in GA has million dollar homes.
Yeah, I thought the same thing at first, but Fulton County has tons :-o
Chakib,
I like promissory notes, and use them all the time.
Thanks for your help bnorton! One more thing though... When are you exactly prommising to pay? Is it upon closing?
Basically the promissory note states that when both sides agree that all contingencies have been met that the promissory note shall be converted to a deposit to be held in escrow. That generally ends up being done at the settlement table. The bottom line is that you end up with no cash out of pocket unless you default.
[ Edited by chakib on Date 10/20/2004 ]
WOW! Great info! How long have you been doing this??? Just Curious... :-o
I am currently in my second year of investing full time.
Just some information not a lot of people know--if you have a bilateral Agreement and the parties are making promises that a reasonable, rational-thinking individual would expect them to keep their word, that satisfies contractual consideration. You have to give up a concession that has a worth in exchange for something else of value, but consideration (and, in this case, earnest money) need not be cash or the promise to pay cash. In a Real Estate Purchase and Sale Agreement, just placing the price is enough. You agree to sell to me for $100,000. I agree to pay $100,000. There is a catch, though. If the Buyer can back out (weasel clause), it is no longer a bilateral Agreement--it's now a unilateral Agreement. Like an Option, if you did not pay the State minimum, it would not be enforceable in court. Your Agreement should state that upon default the Buyer forfeits the earnest money (which is as low as you can negiotiate) and also that retention of the binder deposit is the Seller's only legal recourse. By contrast, an Option becomes a bilateral Agreement once it is exercised (no separate purchase Agreement is needed to close).
[addsig]
Thanks for that information, good thing I was a licensed insurance agent because if I did not have that knowledge I would say what the h*** did he just say? Thanks though any information is needed information
Quote:
On 2004-10-20 11:16, LeaseOptionKing wrote:
Just some information not a lot of people know--if you have a bilateral Agreement and the parties are making promises that a reasonable, rational-thinking individual would expect them to keep their word, that satisfies contractual consideration. You have to give up a concession that has a worth in exchange for something else of value, but consideration (and, in this case, earnest money) need not be cash or the promise to pay cash. In a Real Estate Purchase and Sale Agreement, just placing the price is enough. You agree to sell to me for $100,000. I agree to pay $100,000. There is a catch, though. If the Buyer can back out (weasel clause), it is no longer a bilateral Agreement--it's now a unilateral Agreement. Like an Option, if you did not pay the State minimum, it would not be enforceable in court. Your Agreement should state that upon default the Buyer forfeits the earnest money (which is as low as you can negiotiate) and also that retention of the binder deposit is the Seller's only legal recourse. By contrast, an Option becomes a bilateral Agreement once it is exercised (no separate purchase Agreement is needed to close).
Just wanted to throw into the group that there are many many many million dollar homes in GA. Primarily in the Atlanta area and Savannah area. The rest of the state is just weeds