Assignment Of Contract Question?
I was talking to a realtor the other day telling him about how I wanted to get in to real estate investing and wholesaling. He told me that to do an assignment of contract that I would have to get the buyer and sellers to sign my assignment contract with my fee. I thought that all I had to do was put "and or assigns" on the purchase contract. Then have the buyer sign the assignment contract with my fee on the contract. Am I correct on this or is the realtor correct. All info will help out a lot with me becoming a REI. Thanks
When I have assigned contracts in the past, the title company has needed the buyers and sellers to sign the assignment. BUT, there has never been a problem with either party signing. I deal with motiviated sellers and if I am assigning the contract, the buyer is going to make plenty of money. The seller does not care that you are letting someone else close on the deal, they are getting the price they want.
I always let the seller know that I am not going to close on the property after all, but I made a promise to the seller that the property was going to be out of their hair so to fulfill my promise to the seller, I got someone else to finish the transaction for me.
Just be upfront with everyone and let them know that the end result will be the same. You do have to have a strong enough buyer that he is not going to leave you hanging at the end. That could potentially leave you looking like a fool. Always have a backup plan, maybe doing the deal yourself.
I just did an assignment this week as a matter of fact. I actually forgot to put the and/or assignee in the contract and it didnt pose a problem.
I Put the house under contract with full intentions of buying. The more i looked the more problems i saw and didnt really want to open a can of worms so i decided to assign it.
I called up an investor i know and told him that i had a house under contract and i was willing to sell for X. He drove by and said he wanted it. All he knows at this point is that he is getting a house for X amount. I then tell him since i have it under contract i will just assign it to him rather then double close because it is easier.
I then call the seller and tell them that it needs to much work for what we normally do so i have a business partner of mine who is going to purchase it under the rights of the existing contract.
I then bring My buyer to the town hall and we sign an Assignment for X dollars and have it notarized. We made a provision in the assignment that stated that money will not be paid to us unless they recieved clear and marketable title and also that they had to close. So nothing is paid until closing.
Now we fax this to our buyers attorney and we do not have to show up at closing. The check will be made out to my business and will be mailed to me. However, i can go to closing if i want (i have before).
I hope this really clears things up for you,
Ryan[ Edited by ryand on Date 03/15/2005 ]
If you are buying an assignment, how do you work the financing? I just got done meeting with a person who has a contract to purchase a house for $125k. As it sits, it is easily worth $165k. She wants $20k for the assignment ($5k up front and $15k at closing). I called my banker and he said his institution will not lend on a transaction such as this.
I really cant tell you much about that but the guys that i assign to use hard money or cash when they buy. One other assignment i did with a person that DID use conventional finacing was good friends with his brokers and was actually partnered up with him on this deal. As far as i know it should be almost considered as a lien and they SHOULD lend on it. So as far as i know it shouldnt be a problem. I could be wrong.
Thanks,
Ryan
In that case you said you have a investor friend, who bought the property from you. He probably used hard money to complete that transaction, not a conventional bank for normal financing. If i am wrong please tell us the name of the bank that did the financing, and all of our problems are solved.
It was Hard Money for the first one but i am not sure what the other guy used because his broker was a partner. i actually think he might have taken an equity line out on his house and used that.