California RE Purchase Agreement Assignment
Has anyone had any issues with the ? 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?
I used that contract for my first of year of wholesaling. You don't need to put and/or assigns. However, I think you are asking for trouble if the seller finds out that you've assigned the contract only when it comes time to sign the deed (to someone else). I feel full disclosure works better.
I now use a very short, succinct contract. It includes a disclosure about assignment, and about possible re-sale via double close. My title company was sending out disclosures to both the buyers and seller and I tried to find a way not to bring attention to it, but the title company wouldn't budge. So now it's disclosed in the contract.
The more sophisticated the seller, the more likely you are to run into problems when trying to do anything outside of the ordinary. Wholesaling in a hot market is thought of by many consumers as a disguised listing agreement.
I can only say what works for me, but I think disclosure is better. Kristine
Kristine,
Thanks for the reply, where did you get the contract you use? Did you or an attorney draft it?
Thanks
Ryan
I disagree that you are asking for trouble if you do not disclose what you intend to do with the contract or a property.
By law the buyer is not obligated to disclose anything, only the seller, unless you are licenced real estate agent or broker, buying as an individual. Nobody can sue you.
All the contracts, at least in CA, are assignable unless stated otherwise. So, check your contract and if it says that you cannot assign, then just cross it out. If it says nothing on the subject, then it is assignable.[ Edited by Olga on Date 06/11/2004 ]
Kristine,
Welcome on board this board, I would say glad to meet you, however we have met before, so glad you are here.
Your expertise as an investor is most welcome here.
John $Cash$ Locke
There are a couple ways around this issue.
#1- You could simply tell the seller you are closing in your partners name if you are going to "wholesale." Theoretically you are doing this due the fact that you are getting paid a percentage of the profit.
#2- You could close in your name with a private investor loan or a hard-money lender loan. The day it closes, grant deed the property to your "wholesale buyer" and then collect your fee and have your new buyer assume the financing in place.
Best Riches,
Jeff Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 06/13/2004 ]
What is legal might be different then what works the best in this case.
If you are assigning and the seller does not know you might get a problem when they find out. Maybe they try to change the deal, etc. Hence you get a bit of a mess even if the deal works out in the end.
If you disclose up front you will surprise the seller less. This could be helpful if there are other things you need the seller to do before closing (either related to the assignment or related to something totally disconnected from the assignment).
I would expect that being very upfront about a possible assignment will reduce the number of accepted offers. It has for me. At the same time the closure rate might be higher (again, it has for me).
John
[addsig]