Distressed Contract Holder- Assigned Contract?
A friend has a contract for 175k on a house that comps 201k. Contract expires in 5 weeks, and she is having trouble finding financing w/ no cash and a disability. Can she assign contract to me for $4,000, and we have just one closing? What is the minimum I would need to come up with for downpayment w/ 750 credit score? Who would be able to guide us through assignment process - title co?
Have her open up escrow as an "assignment". After the seller signs the escrow instructions, have her call escrow and tell them that she is going to assign the escrow to you. Then give her
4k. I would call escrow and verify with them first that the escrow has been assigned to you. If the sellers have a problem with this, have your friend tell them she wants to close in her partners name for tax purposes. They should not have a problem with this as most sellers just want their $$$$$.
You should be able to get in with no money down if this is a primary residence. There are a lot of programs out there. One of the more popular programs is the 80-20. You get an 80% first and a 20% second HELOC.
If you have problems closing in time, no
problem, have escrow draw up an amendment for an extension. The sellers should not have a problem as they want their money!
Good Luck
Jeffrey Adam
_________________
"The only place success comes before work
is in the dictionary."[ Edited by JeffreyAdam on Date 01/22/2004 ]
IF your friend had an ability to assign clause in her contract, then she can assign her contract to you for the $4000 and then she is out of the picture. All it takes is a simple assignment form to be filled out that references the contract and becomes an addendum to the contract. There are legal forms available online for a minimum fee. I bought mine for $10 at uslegalforms .com, called Contract Assignment, Control # US-00469. Then you have the sole right to purchase the property under the conditions of the original contract which means there is only one closing. Your friend got her money when she assigned the contract. It could get more complicated if you don't have the $4000 now to give her for the assignment so you must wait until closing to give it to her. This complicates matters in obtaining the loan as well.
Sounds good...I have 4k now for her, the financing though would have to be non-owner occ, and I have to go stated cuz my income is from rental property. Any other creative ways to get lender to give some credit for buying below market?