Getting Financing After Assignment Of Contract?
I got a purchase contract on a home, did a contract assignment with a new buyer.
The problem is that the buyer's Mortgage Company said that they won't get involved in "flipping", and I will have to go on a chain of title.
Is there any way to avoid that?
Any Mortgage Company out there that would be able to close without going on title?
Any help, suggestion or referral would be greatly appreciated! Thanks!
Most people would only assign a contract to a cash buyer.
You could get the original seller to write up a contract to the buyer, with instructions to the closing agent to pay you $XX from closing. The mortgage company should not care about the sellers closing costs
Brenda
Thank you Brenda!
Since this was (is) my first assignment, I didn't know any better!
Now the next questions are:
How do I assure, that I won't be cut out of this deal when I get my seller and buyer together?
Who supposed to instruct the closing agent to pay me $xx?
Do we have to put that in the new contract ?
And if I'm not involved in the deal as principal, then I need a RE licence, don't I?
Sorry about all these questions, but I got a good deal, I just don't know what to do with it!
Thanks!
Sandra
Sandra:
I would not advise doing that route due to the fact I have seen people get cut out of the deal and sellers find out the house is being sold for more and back out of the deal!
I would recommend you get financing from either a hard-money lender or private investor... Close the deal and deed it over to the new buyer and collect your fee. You could even have them assume the financing as long as they have decent credit.
You dont have to be a real-estate agent.
It is not hard to find private money:
Place this ad in your local paper:
"Real-estate investor with proven track record looking for other investors who want to make 10-12% on their money secured by a First Trust Deed." Pay them 10% if they want monthly payments and 12% if you can pay them when the house sells.
Best Regards,
Jeff Adam
[addsig]
I sign a regular P&S contract with the owner. The only differences are that (1) the contract is assignable (2) give myself about 35 days to close (3) give 25 days for inspection (4) require access to the property (5) cash sell.
It is very difficult to wholesale occupied property. If it is occupied, you must already have a good buyer in hand (as you can not show it many times) or it is such a good deal that someone will buy it from pictures without ever entering.
Then I sign an assignment contract with the buyer. The assignment contract states that they will take over my place in the original contract except that (1) the sales price will now be $XX, with the difference payable to me at close (2) they get only two weeks to close (3) they get no inspect period.
You are a principle as you are on the original P&S contract and the assignment contract.
I let the seller and buyer close. I do not attend. I tell the seller that I partner with many different people, depending on the project. Close to the close I call the seller and tell them that Peter (or who ever) is partnering with me on this and he will actually take title. Hope to see them at the close, but I am not be there because of whatever.
I call the title company and demand to see a copy of the HUD. I ask that they put my assignment fee as a "Buyer's Fee" or some other item other than "Assignment". I also have them make it payable to my LLC name, which has never been meantioned to the seller.
I have a copy of an assingment contract if you want one. Just PM or email me.
Brenda
Brenda:
I am very impressed that there are actually some other people out there actively 'wholesaling' properties!
In California, we do it a little bit different. We either open up escrow as an 'assignment', collect the wholesale fee and simply 'assign'. Or close in our name, deed to new buyer, collect fee at the same time and have them assume the financing that is in place by a hard money lender or private investor...
In terms of time frames. What works out here is offerring to close in 7 days or less. When you tell people that you will close next Friday and they will have their check versus in a month or two, it is a whole new ballgame...
Best Regards,
Jeff Adam
[addsig]
To Jeff and Brenda,
Thank you guys for your replies!
I was hesitant to do it that way too, because of the possibility of being cut out, or the owner backing out.
My buyers have good credit and they would qualify for a new loan, they're pre-approved.
The home is worth 170K, need some cosmetic work, about 4K and I'm selling my contract for $119,500.
I do have a P&S Contract with the sellers, and my contract is assignable too. I got 45 days to close. My buyers have seen the home and they want it. Their Mortgage company is the problem.
Brenda, can you email me a copy of your assignment form to **Please See My Profile**. I really appreciate your help! And Jeff's help too!
Sandra
I was trying to put my email address in there but it got blocked out.
Let's try this again!
sandralegendi at yah......you know the rest! Don't you?
Thanks!
Sandra
I cannot get my private message since I'm not a paying member on this site.
Please send it to the above email address.
Thank you!
Sandra
Hey Jeff
If I was to take the route of closing the deal and then having the investor pay my assignment fee and assume the loan, how then will I be compensated for the 10% down required by my HML and all other closing costs for that matter??
Quote:
On 2004-09-15 01:04, JeffreyAdam wrote:
Sandra:
I would not advise doing that route due to the fact I have seen people get cut out of the deal and sellers find out the house is being sold for more and back out of the deal!
I would recommend you get financing from either a hard-money lender or private investor... Close the deal and deed it over to the new buyer and collect your fee. You could even have them assume the financing as long as they have decent credit.
You dont have to be a real-estate agent.
It is not hard to find private money:
Place this ad in your local paper:
"Real-estate investor with proven track record looking for other investors who want to make 10-12% on their money secured by a First Trust Deed." Pay them 10% if they want monthly payments and 12% if you can pay them when the house sells.
Best Regards,
Jeff Adam
You have your wholesale buyer reimburse you!
Best Regards,
Jeff Adam
[addsig]
Legendi,
While I agree that it is always better to wholesale to a cash buyer, there are plenty of lenders out there who will lend on an assigned contract. I wholesale to cash and non cash buyers with no problem. Have your buyers contact their mortgage broker and place with a different lender.
Hi bnorton,
Thank you for responding.
Can you recommend a lender who is willing to close with contract assignment?
Thanks!
Sandra
Hi Jeff,
It was very nice talking with you.
And I thank you for the great advise you've given me about the assigning the escrow to the new buyer.
Sandra
Hi bnorton,
Thank you so much for these names, I will give them a call and see.
Sandra
It will not be pretty, but here it is
This Agreement dated the _____ day of ____________________ is made between _________________________________________
____________ (Assignor) and ________________________________________________________________________________
(Assignee), regarding the property described as:
The property address is known as ___________________________________________________________ (Subject Property)
WHEREAS, ________________________________________ (Assignor) entered into a Purchase and Sales Agreement dated ____________________, _______ with ___________________________________________ (SELLER) for the purchase of the Subject Property, and whereas Assignor wishes to assign its rights and interest in the Purchase and Sales Agreement, it is hereby agreed between Assignor and Assignee as follows:
1. Assignment Fee. Assignee shall pay Assignor an assignment fee of _____________ U.S. Dollars. Assignment fee is payable at close and shall not become due to Assignor until that time and unless title to Subject Property is delivered to Assignee as per the terms of this contract and the Purchase and Sale contract.
2. Down Payment. Assignee shall pay ______________________ U.S. Dollars of the Assignment Fee at the signing of this contract. The Down payment is refundable only if the Seller does not perform.
3. Closing Date. Closing is to take place on or before ____________________.
4. Contract for Sale and Purchase Acknowledgement. Assignee accepts all terms and conditions of the original Contract for Purchase and Sale dated _________________, in its entirety including all addendums associated with this transaction.
5. Hold Harmless. Assignor shall not be held responsible for the performance of the Assignee, and shall further be held harmless for any other circumstances arising from or in connection with the Subject Property or the Purchase and Sales Agreement.
6. Non Performance Acknowledgement. Assignee has read Paragraph S under Standards for Real Estate Transactions on the original Contract for Purchase and Sale and hereby agrees to abide by its terms. Assignee agrees that the terms of Paragraph S shall apply to all deposits and down payments tendered under this Agreement
7. Ownership and Property Access Acknowledgement. At the time of this Agreement, Assignor owns a contract for Purchase and Sale of Subject Property, Assignor does not own title to the Subject Property. Assignor and affiliated associates do not authorize Assignee to enter onto the Subject Property. Assignee holds Assignor and associated affiliates harmless from liability arising from Assignee entering onto the Subject Property.
8. Limitation of Assignment. It is hereby acknowledged by Assignee that this Agreement to Assign Contract for Sale and Purchase and the original Contract for Sale and Purchase are not assignable by Assignee without the express written authorization of Assignor, authorization of which may be withheld for any reason by Assignor.
9. Additional Disclosures and Acknowledgements.
a. Inspection Report and Subject Property Condition. Assignor and affiliated associates make no warranty express or implied regarding inspection reports, subject property condition or value or other reports provided to Assignee by Assignor or third parties concerning this property. Assignee is advised to independently verify the accuracy of all information contained in reports concerning this property.
b. Real Estate Brokerage Disclosure. Assignee acknowledges they are conducting a transaction dealing direct1y with Assignor for the purchase of the Subject Property. Assignee is not relying on or being represented by a real estate brokerage in this transaction.
c. Affiliated Parties Disclosure. Assignor shall provide a statement of affiliated business arrangements. If any.
d. Lead Based Paint and Energy Efficiency Brochures. Assignee acknowledges receipt of Lead Paint and Energy Efficiency Brochures.
e. Entire Agreement This agreement constitutes the entire agreement and no modification of this Agreement shall be binding unless signed by the parties. No representation, promise or inducement not included in this agreement shall be binding upon any party hereto.
10. Additional Terms and conditions of this Agreement are as follows:
AGREED AND ACCEPTED:
_________________________________________________ __________________________________________________
Assignor Date Assignee Date
_________________________________________________ __________________________________________________
Assignor Date Assignee Date
www.realtor.com may prove helpful for comparables. At least you can find listings in the area. True comps that include sold and expired listings will require a Realtor. Unless you want to check on sales in the county records.
Chris
check out realquest -- they have a free trial