Assignments
Is anyone familliar with assignment deals. Where sign a contract for a set price, ask for 30 to60days to close a sell it for about 5K more than you negaitated with the original seller. Can someone explain how its done?
Thanks!!
You are actually assigning the contractual right to purchase the property. You have to be careful many contracts prohibit assigning unless the sellers approves. You never hold title the closing is directly from the seller to the new party. You will need an assignment agreement, which is very straight forward.
Quote:
On 2004-05-06 16:50, johnbriscoe wrote:
You have to be careful many contracts prohibit assigning unless the sellers approves.
johnbriscoe,
It's interesting that you say that because several people here repeatedly say that one doesn't have to have the contract include a provision giving the right to assign. They even recommend that buyers not tell the seller they want to assign. From what I've seen in PA, when the buyer wants the right to assign, the buyer or the buyer's attorney puts a specific provision in the contract.
I guess it really wouldnt hurt to let the seller know. I figure more than likely they are an investor, or if not they realize that you are one. Why would they care if you assigned the property. They still get theere agreed upon sales price.
Now do you have to put in the assignmnet addendum that you will be moving the property for 5K more than what they are asking? (5K is just a estimate it may be 10K)
I use an "OFFER TO PURCHASE" agreement, that allows me to sell the property to someone else.
Lori
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Nancy
Good point. If the contract is silent on assignments, no problem. If it say "No assignments without permission" the seller could refuse to sign the deed at closing and try to sell directly to the end buyer. Most sellers just want out and will not try to go around, but you never know.
Simply put-ALL contracts are assignable unless specifically prohibited or specifically assignable only with the sellers consent. The most common sales contract is the Realtors contract which has a "non-assignabiltiy clause" in it. Many motivated sellers will readily agree to an assignment. They want to sell the turkey. Don't they????
This discussion should be widened to include all other contracts such as leases, lease options, contract for deed, options, etc. etc.------All Contracts..
From a practical and fiction-free point-of -view, why wouldn't you put that clause in your agreement??? It helps to communicate and facilitates the transaction. It saves attorney fees.
Lastly, assigning a contract does not provide relief of contractual liability unless you specifically have a clause/supplemental document which does so. See why you should get these things in writing??
Tinman,
Explain the offer to purchase agreement!!
Quote:
On 2004-05-07 13:43, kjzinvestments wrote:
Tinman,
Explain the offer to purchase agreement!!
It allows the buyer or assigner , so much time, then a sales contract will be drawn up, which would include whoever the property is going to. I also an option to purchase, which ever one I have handy.
Lori
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sammyvegas,
I agree with you that if the buyer wants the right to assign, the buyer should put such a provision in the contract.
johnbriscoe,
I wonder if the buyer and assignee would have a leg to stand on where a buyer didn't put a right to assign provision in the contract, seller found out the buyer was assigning, and then the seller refused to sell to the assignee. In the deals I've been involved with in brokering, RE attorneys representing buyers and using "custom" (ie, not Realtor form contracts) always put in a right to assign provision.
Nancy,
I think it is always better to spell things out in contracts. It helps avoid disagreements later, but Sammy is right the contract is assignable unless it says it isn't. Why would you want to risk having to sue an angry seller who was mislead.
johnbriscoe,
I don't believe in misleading seller or buyer and only put forth the hypothetical to illustrate there's risk to a buyer who wants to assign, doesn't include an assignment provision and tells the seller he/she isn't going to assign the contract. Some people think very differently on this point and recommend to others that they lie to the seller.
i agree with you 100% that contracts should be clear. Ambiguity in a contract hurts everybody. A clearly written contract, to me, is one where a stranger can pick it up cold and understand what the parties intended.
Nancy I agree with you. I wasn't speaking about "you" specifically, but rather in general as an example.
Thanks
Personally, I beleive that "the truth will make you free." Always be straight forward when doing deals.....nothing hidden or assumed, its not even worth the hassle. I think everyone is on the same page here.....;>
All you have to do is put in the contract to purchase the right to assign. The buyer is "you or assignee" If the seller will agree to sell to you at the stated price why wouldn't he to someone else? This is done everyday. Also, if you want to be able to show the property to someone else before you own it, get the seller's permission for this in the purchase contract. It will make the process a lot easier for you.
In NY you are able to assign your right to purchase even with Bar Association Approved Contracts. The wording after your name on the cover should simply say (and or his/her/its assigns).
However, the seller has the right deny you the ability to assign. If they don't deny you by the 3-5 day initial contingency period then you are good to go! I allow it when I am selling but only with prior approval of the new purchaser. I want to close my deals and I want to make sure the new purchaser has the financial ability to finish the transaction.
I have completed many buy side transactions where I have made 100'S of thousands of dollars buying properties and flipping them with assignments. It's a great technique to have in your tool box of strategies!!![ Edited by caiwny on Date 05/08/2004 ]
Quote from sammyvegas: "Lastly, assigning a contract does not provide relief of contractual liability unless you specifically have a clause/supplemental document which does so."
Sammy, what is contractual obligation, and can this hurt the person who is attempting to assign, but the buyer can't close on the deal?
Alan
So when you get permission by the seller to assign to someone else and show the property to someone else, do you have to have any kind of downpayment for the property at the closing? Do the attorney just transfer everything without you having any money on the table?
Also assignment fee. Some say it is not good to go over $5000. is that a rule of thumb or what ? and i saw it on this site http://www.thecreativeinvestor.com/Article558.html
Uniform Commercial Code Section 210-2
"Unless otherwise agreed all rights of either seller or buyer can be assigned except where the assignment would materially change the duty of the other party or increase materially the burden or risk imposed on him by his contract , or impair materially his chance of obtaining return performance. A right to damages for breach of the whole contract or a right arising out of the assignor's due performance of his entire obligation can be assigned despite agreement otherwise."
In other words, contracts are always assignable unless the assignment dramatically changes the odds of the contract being completed.
None-the-less, I write all my contracts in my name "or assignee" or "on behalf of a corporation to be formed". If the customer asks (they almost never do) I point out that as an investor I almost never take title in my name-- even if I keep the property I'm likely to put it in a land trust and the easiest way for me to do this is to assign the contract.
If I'm asked about it, I simply say that I
have a partner, and the phrase, " and/
or assigns" allows me to take title in
his or in our corporate name. It hasn't
been a problem for me.
All of this assignment information is great, however has anyone had any issues with the California RE Purchase agreement? In my experience this contract has no assignment restriction, anyone have any feedback on this issue? Also, in my market San Francisco sellers sometimes are wary of "and or assignee" any ways around this?
Quote:
On 2004-05-07 12:10, sammyvegas wrote:
Simply put-ALL contracts are assignable unless specifically prohibited or specifically assignable only with the sellers consent. The most common sales contract is the Realtors contract which has a "non-assignabiltiy clause" in it. Many motivated sellers will readily agree to an assignment. They want to sell the turkey. Don't they????
This discussion should be widened to include all other contracts such as leases, lease options, contract for deed, options, etc. etc.------All Contracts..
From a practical and fiction-free point-of -view, why wouldn't you put that clause in your agreement??? It helps to communicate and facilitates the transaction. It saves attorney fees.
Lastly, assigning a contract does not provide relief of contractual liability unless you specifically have a clause/supplemental document which does so. See why you should get these things in writing??
i would like to know who who gives you the purchase aggreememt forms the realestate attorney or who ?
[quote]
On 2004-05-07 12:10, sammyvegas wrote:
Simply put-ALL contracts are assignable unless specifically prohibited or specifically assignable only with the sellers consent. The most common sales contract is the Realtors contract which has a "non-assignabiltiy clause" in it. Many motivated sellers will readily agree to an assignment. They want to sell the turkey. Don't they????
This discussion should be widened to include all other contracts such as leases, lease options, contract for deed, options, etc. etc.------All Contracts...
Does that mean I can grant the right of assignment to my leasee so if he wants out of the lease HE must take on the responsibility of finding a new candidate to finish out the term? If so, can I have the right of refusal as to who he assigns the contract to?
Jennifer
Hi Jen:
It is up to you, depending on what you put in your contract. I would not be to hip on having people I lease my properties to do a sub-lease and have someone come in and thrash my place. In my lease contracts, I always put a clause that states they cannot sub-lease. I have however had tenants in NPB who rented with a group of students and one of them wanted out and had a replacement. I let the replacement move in upon checking credit, getting references, etc......
Best Riches,
Jeff Adam
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