Contract Assignment

Comments(7)

• 
  DaveREI5th October, 2003

  Your paying for the assignment... the terms of the contract remain...so be careful and read it ......

• 
  AllCash4Homes5th October, 2003

  Hi!
  
  I have a related question.
  
  Does the seller ever have a problem when a different person takes over the position?
  
  Perhaps I just don't know enough about the actual logistics of assigning a contract (which I expect vary at least some).
  
  How exactly does that happen? Is the assignment just paperwork (and money, of course) transacted between the assigner and the assignee in private without the seller even knowing about it? Who and when is the seller told that the position is being assigned? Does the assigner point out that they will (or possibly will) assign the position before closing, so that the seller knows that they will be closing with someone else? Does that ever make the seller nervous or feel duped? Perhaps as long as the deal closes they are happy regardless of who they sit across at the closing table?
  
  BTW, I understand that a double close is where both the assigner and the assigneee are at the closing, and there are actually two complete transactions. Perhaps some folks work contract assignment by having both assignee and assigner show up at closing, even though they're not truly doing a double closing?
  
  I'm pretty confident I could talk my way through the situation, but wanted to know how I might be able to avoid any awkward situations.
  
  
  Thanks in advance for any help that you generous veterans out there might have!
  
  
  allcash4homes

• 
  GFous5th October, 2003

  For more info on double closings and assignments see article and subsequent comments:
  
  http://www.thecreativeinvestor.com/Article380.html&mode=&order=0&thold=0
  [addsig]

• 
  jorge1215th October, 2003

  Contracts for the purchase/sale of real estate are, by nature, assignable. The seller need not consent to the assignment (unless the contract says otherwise). The assignor or orginal contracting party remains on the hook to the seller in the event that the assignee, or new buyer, fails to close on the contract. This is the default rule unless the assignor gets a release from the seller.

• 
  yehoshua305th October, 2003

  Thanks for all replies.
  I think I understand a bit.
  What are the pros and cons of contract assignments?
  Thanks
  -Ariel

• 
  jorge1217th October, 2003

  Pros: cash money up front, no closing costs, no need to qualify for financing, ability to get in and out of a deal quickly, you are not obligated to buy the property
  
  Cons: buyers are hesitant to give you a large assignment fee upfront, you stay on the hook if your buyer doesn't perform

• 
  yehoshua307th October, 2003

  Thanks for the reply.
  Ok. So he benefits because I'm the buyer.
  I'm simply looking to buy up rental property. So the only pro for me is that I get property below fmv. (or so it seems)
  The comps are only about 10k above the price he wants.
  If I have to put in 5k worth of repairs, then I may not do so well if the prop hangs around for 1 month or 2.