Have Questions Re Assigning A Purchase Contract
Helllo to all- I need to get an understanding on Assigning Contracts. I would appreciate your expertise on the subject.
First, once I get a purchase agreement signed by the seller, and I find a willing and able tenant/buyer, and I give them the assignment of sales and purchase agreement what will stop them from going to the seller directly, and cutting me out of the deal? What recourse would I reall y have?
Second, I have read that your assignment fee should be 5% of the FMV price. Is this fee usually paid upfront or at closing.
and my last question is--
I live in Cleveland Ohio can I find a title company easily to do this type of transaction.
I wonder why I can't find more on this subject of selling purchase agreements. I f I understand so far from what I have read, this is the best strategey to take when you're trying to start off with limited capital and not -so-perfect credit.
Please advise. Thank you. 
Here’s my process, other’s may do it differently:
1. Place the house under contract with the seller (Example: $20k Deal) and give an earnest money deposit (normally $10 - $100).
2. Fax over property details to my attorney (100% real estate) to have a title search ordered.
3. Take a picture of the house and place it on my website or simply call an investor on my list that buys in that area.
4. Once a buyer wants the house, I will place the house under contract with the buyer with a $500 earnest money deposit if we’ve never done biz before. (In this example, my contact with my buyer would be for $25,000 – I would have advertised it at $30k to give myself negotiating room with my buyers.)
5. Call my attorney to set up a closing date and fax over the details on who will get paid what. The HUD-1 statement would read $20,000 to seller - $4500 ($500 already paid by buyer) to Me - my buyer would pay all closing cost and of course get the house.
NEXT DEAL – Others do it differently but that’s my process
Thank you sooooomuch for your response! Your system sounds great! Probably better than many I've read about!
My goal is to get going at this, and perfect a system, so that one day, I can quit my secretarial job that I've have really "outgrown," and also turn in my realtors license--(what a rip-off on your return, for the amount of work, and money you put into it!) I would love to come back here one day to this forum, and help someone, just like me with what I have learned.
Are people really successful doing these type of deals? What are the risks involved (if any, since you really are not buying the house) Just your earnest money, I would imagine.
For the Purchase Agreement, how many days do you give yourself to closing (to control the house) until you find a buyer? I was thinking 45 days? What do you think?
And my last question, do you have a website that you list your homes on that I can join, or were you suggesting that I get one?
Okay, okay, this is my last question (smiles)---Who would your target market be? Ugly Houses, or Pretty Houses?
Thank You Again, For Your Expertise--
It is greatly appreciated!
Bea
"Take This Job And Shove It!"
Junkers,
When you close and a check is cut for you and one for the initial owner, how do you garuantee that the owner is going to use that check to pay off the mortgage? Or is the check made out to the original lender in the payoff amount and what is left over goes to the original owner?
I am very new at this and trying to understand the assignment process.
Since Junkers did not respond to your question, I will tell you what I know. (smiles)
When the "check is cut," the title company, or in this case the attorney will direct the checks according to who is listed on the settlement statement. The mortgage is generally the 1st lien, and is paid out first, what is remaining after everyone gets their fees, goes to the seller. That's what escrow is (the third party which stays neutral, and holds the docs and funds until the deal closes. So the escrow agent be it an attorney or company, send the check. Everybody gets paid!
My question is, after you get a sales contract on a property to assign, and you start talking to buyers about the house, how do you keep the tentative buyer from "cutting you out" by going to the seller directly?
Uhmmmmm???
Hope this helps you!
Bea
fip2u
For the Purchase Agreement, how many days do you give yourself to closing (to control the house) until you find a buyer? I was thinking 45 days? What do you think?
****Normally 45 – 60 days and unlimited access to the property, I’ve turned deals down before if I can’t get unlimited access because that will slow or eliminate the wholesale process…. Your investors need access to view the property at their convenience.
And my last question, do you have a website that you list your homes on that I can join, or were you suggesting that I get one?
****My website is http://www.205Junkers.com which is local to my area; I can design a similar site if you’re interested. Just email me **Please See My Profile**
Okay, okay, this is my last question (smiles)---Who would your target market be? Ugly Houses, or Pretty Houses?
****I wouldn’t say just Ugly Houses but JUST DEALS ON HOUSES UGLY/PRETTY, of course most of my houses are ugly houses but I have wholesaled pretty houses also. Don’t limit yourself because motivated sellers are motivated sellers regardless of the house condition. As a matter of fact, the house I live in was purchased at a huge discount and I would like to think it’s pretty.
Jennifer_K
When you close and a check is cut for you and one for the initial owner, how do you garuantee that the owner is going to use that check to pay off the mortgage? Or is the check made out to the original lender in the payoff amount and what is left over goes to the original owner?
****Once the title search is done it will reveal any unpaid mortgages, liens or taxes, no one will get paid until those are amounts are settled either before the closing or in most cases checks are cut to clear these amounts before the seller or myself will be paid at the closing table. We are paid the difference, which of course is all figured out before we go to closing.
fip2u
My question is, after you get a sales contract on a property to assign, and you start talking to buyers about the house, how do you keep the tentative buyer from "cutting you out" by going to the seller directly?
Uhmmmmm???
****Well, I’ve never had a problem with the buyer going behind my back to the seller…. This process is no different than if a realtor was involved, what would keep the buyer from going behind the realtors back. The answer is the CONTRACT!
If you ever think this would be a problem, you can simply record the contract and when the title is pulled your contract will show and this would have to be resolved before anyone could buy the house.
[ Edited by 205JUNKERScom on Date 01/20/2005 ]
Thank you 205Junker!!!
I am going to get started soon at this. I have been reading on so many strategies to find the right one to get me started since my credit and money are veryyyyy limited. I thinks this is the route to go.
I will be contacted you shortly about a web page,
Again, thank you for your direction--I'm off and I will write to you and let you know how I do!!!
Bea
PS Good Luck Jennifer!!
Hi all,
I keep seeing over and over again that to protect yourself, you can go record a contract. How do you actually do that? Is it NOT a non-recordable document as far as public documents go??? In other words, it is not a mortgage or a deed or a lis pendens so can someone explain this?
Thanks..
Yes you can record a Purchase Agreement. It is my understanding that you can record any legal document/contract. In this case, recording the purchase agreement will protect your interest in the deal. Hope this helps!
Good luck
Bea