Assigning A Contract
Ok...here is the deal. I have found a property worth 80k and the seller is willing to sell at 64k. I already have a buyer who is already approved for a mortgage that is willing to buy the property at 74k. How do I assign the contract? When am I paid my spread? Will the buyers lender have a problem with me being involved in the transaction?
Congratulations. I've never assigned a contract, so I'm not sure if you really have to do anything at all, or if this is just a formality.
Contact your local RE attorney or title company and they should have the paperwork you need to initiate the closing process. Let them know you are assigning the contract and they can provide you any extra things you will need to do. Typically, most people like to have the seller and buyer come in at different times to sign the contracts so that the two parties never meet.
Any way, to answer you question, you get paid from the proceeds of the sale, so after the buyer and the seller have signed the contract.
Regarding the lender. How would the lender even know you were involved? They are not at the closing and never see the sale contract. They are only interested in the deed.
hth,
Robert
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On 2004-06-24 02:14, cjmazur wrote:
The question I had here was it seemed that the final buyer wanted to bury the 10K in the loan.
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I assumed that this would be typical and would be paid out of escrow. By doing a simultaneous close the seller might somehow know what you sold it for and the buyer probably doesn't care, since the buyer is getting a great deal. By doing a double close, then the $10K would probably be all eaten up in additional closing costs, but you would hide the final sale amount from the original owner if you felt you needed to do that.
Robert
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I can see the advantage of the double closing but this seller has been trying to sell for a while and is just happy to be getting rid of the house.
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On 2004-06-24 12:31, GregTanner wrote:
I can see the advantage of the double closing but this seller has been trying to sell for a while and is just happy to be getting rid of the house.
Greg,
I think if you let the seller you know you are an investor and you buy and resell homes to make a living, then they should understand that you will make some money on the deal. You could let the seller know that some of the homes you resell you hold for 6 months to a year (if that is the truth) and others you are able to turn around quickly and resell. Either scenario, you are getting paid to take the risk of not being able to sell the property.
What you are offering them is the ability to sell quickly, while you take the risk of being able to resell the property down the road.
Just my opinion.
Robert
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