How to assign a deal to cash buyer

Question

I am on the verge of making my first deal ever.

Two interested buyers, can close in 10 days.

I am doing an assignment of contract.

Can I ask my buyers to put down non refundable earnest money. If such is the case then do I have to do double close. Will the buyer give me an actual check or will provide me with picture of the check he/she has given to the attorney. Instead should I ask for POF.

If I do not have to double close and if the buyer puts down earnest money, how do I acknowledge the receipt of the EM.

After I assign the contract do I hand over the purchase agreement to the cash buyer before the closing. Do I have to be at the closing.

Is it possible the cash buyer will not agree with the terms of purchase contract.

Does anybody have a standard assignment of contract form

Nii Okai · Answer

@Bimal

Congratulations, Bimal for your achievement. You are on the way to success. From the look of things you are not fully prepared to do this deal, however, it is not too late to start doing things the right way. You needed to have a team with an attorney or title company on your team. Get yourself an investor friendly title company asap.

Secondly, the amount of profit you are taking from this deal will dictate if you should do a double closing or just go ahead and have a regular closing. The title company will assist you with the assignment contract if you do not have any yet.

It is okay to collect an earnest money deposit upfront and you are not obliged to be at the closing table. Even though it is the buyer's right to choose his/her title company, you can arrange with the buyer to use your title company - nothing wrong with that.

Again, I say more grease to your elbows....

Darrell Shepherd · Answer

You need to be working with an attorney that's done a few of these so they can hold your hand through it.

There are a couple of ways to do this, you can do a double close, where you actually buy it and sell it at the same time or you can assign the contract and your new buyers can execute it.  Either way, you need to be working with an attorney/title company that has done a few of these and can walk you through the process.

If you assign it, you just need to work that out with the buyer.  Two houses ago, there were four different wholesalers getting paid on the HUD-1.  Kinda crazy, and made me second guess my buy, but my numbers worked, so what do I care?

You're fine with full disclosure as long as you dont get crazy with the profit.  If you take $10k out of $60k, then I wouldn't want the seller finding out about that.  (I've done that, by the way).

Anyway, good luck.  You're learning through action which beats analysis paralysis, just get with people that have done deals like this in your area and let them give you advice.  Most investors are glad to help other guys that are doing deals.

Bimal Doshi · Answer

Firstly, let me thank all of you for providing me with the knowledge and education about Assigning the contract.

Here are more details

1) Yes I have signed the "Agreement for Purchase of Real Estate" with the seller using "my name and/ or assigns".

2) I have disclosed to the seller that I will be assigning the contract for a fee and also provided her with names of both my my buyers.

3) I have not disclosed to her my assignment fee, if you suggest I will disclose the fee to the seller.

4) My buyer is eager to execute the assignment  of contract, I forwarded him the Contract that I drafted from the internet.

Do I have to have a Title company to handle the closing even if I have assigned the contract, or it is the end buyer who will have the Title company handle the closing.

I also get a sense that I need my contract reviewed by an attorney before assigning.

Bimal

Chris Martin · Answer

By the sounds of it, you already have the property under contract. That means you are obligated to whatever terms and conditions you put on paper. I assume your name (or a business where you are a member/principal) is listed as 'buyer', along with an explicit right to assign the contract.

The 'easy' way to assign the contract is to have a one page document stating that for some consideration, the 'buyer' transfers/assigns the contract to a new 'buyer'. Executing (signing) the assignment and receiving 'consideration' (e.g. $2000 or whatever) would then extinguish your rights to the contract. How you wrote the contract and your state law may place other requirements for disclosure to the other (selling) party and/or public notice (recording), which an attorney may be able to help you with.

Once you "sell" the contract, you obligation is transferred and it is no longer your contract.

Nii Okai · Answer

@Bimal

Wishing you all the best. Before long, you will become a real pro.... just take it one day at a time.

Good Luck

Nii

Manny Cirino · Answer

Assigning the contract is not as difficult as it seems. If you have the property under contract it is important that your knows your intentions in my case they know a general statement, "I am and investors who acquires properties either to hold or to flip and in the process I just so happen to help people in urgent need to sell quick". They do not need to know the specific of how you make a profit just inderstand that you intend too.

Once you have the deal locked up undercontract and you have a buyer who is interested all. If they agree to the purchase price then your fee should not be a problem.

I have learned that the easiest what to gets deals accepted and sold is to present the paper work and tell the buyer or seller, "here is my offer/assignment read over it carefully and then sign". Most browse over it and usually never ask questions .

I usualy don't require earnest money from the buyer. But I do use the earnest money I put up to justify my assignment fee. I just put a contingancy that they have X amount of days to wire fund over to the title company or I will find another buyer.

The key to success and to have repeat buyers work with you is to negotiate new terms techinically the buyer has the right to renegotiate the deal adter you assign your rights but if you did a good job then you should be ok. I seen my friends deal come apart because he wrote the contract that buyer would pay all closing cost and his investor was not ok with that he wanted the seller to put up at leasr $1,000 the seller did not agree and the deal fell through.

All the paper work should go through a good investor friendly title company a good title company will allow you to have a smooth transaction. The truth is that it si good to understand the closing process because the first time you see a HUD statement you will realize all the fees there are to account for on the next transaction. But you do not really need to know it all.

All you need to do is Sign the P&S.A and open an escrow witht the title company send them your contract and wire your earnest money(there are wiring fees $25-$100). Market for your buyer once you find one you could either rewrite the contract between the seller and the buyer cutting you out and having them also sign the assignment of contract and forward the papers yourselve to the title company or you could advised the buyer of the title company and they will have him sign everything. You seller will never really meet most likely schedule restrictions will have them come in at seperate times.

Do not try to do too much always follow the K.I.S.S. rule

Bimal Doshi · Answer

Hi Nii Okai,

You are right I am a newbie, and do not have an attorney or a title company.
Per your suggestions I will call a Title company now and an attorney.

See when you read books and people tell you the assignment is just A-B-C transaction, not all the details ae mentioned. So as somebody mentioned the Devil is in Details and I am finding all of it now piece by piece. But my second deal would not be as much as mystery that it is now.

I have already indicated to my seller that I will be making money from this deal and she is OK with it.

But I will call her again and explain to her one more time.

Regards,
Bimal

Raymond,

I tried to click on the persons name so they get an email, but instead it took me the persons Introdcution page, I will play with this little more and figure it out.

Thanks,
Bimal

Raymond B. · Answer

@Nii Okai,

To make the @ work, do the following:

Hold down the shift key and type @?

Look below this Window, and you will see a list of names of people that have posted in this thread.

Click on the name of the person that you want notified via an email, that you responded to them.

If you are a Colleague with anyone that has NOT posted in the thread, and you want them to see your post, hold down the shift key, type the @ and the first 4 letters of their First or Last Name.

Then look below this Window and click on that person's name.

Raymond

Bimal Doshi · Answer

Hi Darrell,
Thanks for your advice. I am open to learning from the experienced RE Investors. So far I have got great advice and making a note of it.

I haven't approached an attorney yet, but since my buyer has already accepted my terms, I will just have my contract reviewed by an attorney. I will be signing the Assignment of contract today or tomorrow.

Does the Seller need an attorney for this transaction or not?

Kelly P. mentioned that he uses a title company once the assigment contract is signed and the Title Company handles everything from there on, does that mean the buyer will use my Title Company. So do I have to be at the closing.

Thanks,
Bimal

How to assign a deal to cash buyer

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