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A M
IL · Member since 2008 · 5 posts · 0 votes

I am under the impression that if one has a property under contract and one has not as yet closed on it - which means that you do not as yet own it - is it true that one cannot advertise that property, i.e. advertising in the newspaper or other general public media. If this is true, how can one try to sell it legally for say, a wholesale or assignment of contract transaction ?

I have come across a realtor that said that if you don't own the property you can't advertise and sell it.

Just having a contract on a property means that you have an interest in the transaction but you still are not an owner of the property unless you close on it.
Although one would not indicate that you are not the owner when advertising the property, could there be a potential legal problem ? Would appreciate a reply Thx

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  • Demos Loizides
    Real Estate Investor · Dale City, VA · Member since 2008 · 317 posts · 77 votes
    16y

    Supposedly, if you are a buyer on a contract, then you have equitable interest and therefore have a right to sell the property.

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  • Donte Mazyck
    Contractor · Charlotte, NC · Member since 2008 · 178 posts · 14 votes
    16y

    This not meant to be legal advice, but make sure your contracts have the assignment clause in them. If not then you might come across problems if someone wants to go so low, plus most real estate contract state specific that you get from agents have a non-assignable clause which your agent might be referring too.

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  • Demos Loizides
    Real Estate Investor · Dale City, VA · Member since 2008 · 317 posts · 77 votes
    16y

    You don't need an assignment clause if you put your name followed by the words, "and/or assigns" after it as the buyer on the contract. If it's a Realtor Association contract, the non-assignment clause basically says, "this contract can't be assigned unless agreed to in writing by all parties" or words to that effect. At least that's what the NVAR (Northern Virginia) paperwork says. If this is the case, you write under the "Other" paragraph, "The seller allows the buyer to assign the contract to another investor" or words to that effect. If the seller signs the contract, you can assign it. You don't even have to tell them you put that in there. This is provided the seller isn't a bank or lender.

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  • Joseph Ziolkowski
    Inspector · Alsip, IL · Member since 2008 · 361 posts · 75 votes
    16y

    A quick note on that too, though I'm not a lawyer by any stretch. It's my understanding that a contract is always assignable, unless it specifically states that it isn't.
    As far as marketing, whether or not you can market the property is irrelevant. If you're looking to assign the contract, what you are really marketing is your rights in the property. That's what you own once you sign the contract, not the property.
    Those rights, or the "paper" are considered personal, and not real property. And you can market personal property all day long :) HOpe it helps!

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  • Demos Loizides
    Real Estate Investor · Dale City, VA · Member since 2008 · 317 posts · 77 votes
    16y

    Joseph,

    You're absolutely right, but you never see anyone advertising their contract with a PDF of it. Everyone wholesaling properties is usually advertising the property in the contract with pictures/videos of that property. After all, that's what the end-buyer is getting.

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  • Joseph Ziolkowski
    Inspector · Alsip, IL · Member since 2008 · 361 posts · 75 votes
    16y

    Very true, that's how it's advertised. That's the enticing part of the RIGHT to buy the property at such and such a price. Any intelligent investor that's bought from a wholesaler would no doubt know that before even making the phone call.
    If you look at any ad, it of course emphasizes the benefits of buying the advertised product. While it might be a little "out of the box" by some conventional wisdom standards, I would defy any jury in the world to convict you of wrong doing :) Once you sell the advertised right, the buyer does have the option to buy the property, but also has the option not to (if they don't mind giving up the assignment fee, that is).

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