when EXACTLY do you assign ?

Question

to all the active wholesalers out there, when assigning your deals, are you doing this after seller has accepted your offer BUT Before doing the actual purchase and sale contract

******************* OR*************

do you go thru and sign the P & S , and then assign that to cash buyer?

Aaron Mazzrillo · Answer

You get the seller to sign teh contract, you deliver that contract to escrow. In escrow you and your buyer sign and assignment agreement. You need to do this if docs go out in your entity name. If you're like me and work with a few extremely trusting buyers, I tell escrow what I'm buying, how much I have agreed to pay, who my buyer is and how much the assignment fee is. Then, she sends out docs with my buyer's name on them so the seller is selling the property directly to my buyer. I do not show up anywhere except on my buyer's closing statement as a one line item Marketing Fee which is my wholesale or assignment fee.

FYI, I don't use purchase and sale agreements or contracts. I do it all verbally with my sellers and via email with escrow. I have an excellent relationship with my escrow company and it just makes life simpler.

Danny N. · Answer

hey @shaunReilly

Thanks for clearing that up for me! Yes indeed it seems we do things a bit different here in Mass.I thought a 2 contract process was the norm everywhere but at least now I know. The fact that we can only close via attorneys can somehow complicate the process coz they tend to want to change things in contract.

BTW i just started listening to the bp podcast (binge listening to catch up)and just listened to your episode, Good stuff Man! I also started implementing your strategy of an offer a day with HUD Homes

Shaun Reilly · Answer

Hey Danny

Just an FYI this question won't make a lot of sense to most people.  I believe that MA is the only (and if not only a handful of others) 2 contract state.  As in pretty much all other places just have one big contract at the initial offer that is more like the P&S we do later on here.

But to answer your question both an Offer to Purchase contract or a Purchase and Sale contract are assignable unless specifically stating that they are not.  In my experience a Wholesaler would try to assign between the offer and the final contract so, similar to what Aaron was saying, the end buyer is on the actual contracts for closing.

You can use the standard state contracts, but you would want to make sure to add in some clauses to cover you and your buyer.  Better to get a customized offer to purchase sheet that an attorney in Massachusetts has created or at least reviewed that will have all the stuff you need as a wholesaler and is compliant with state law.  You can find these around FYI.

Also we are an attorney state for closings.  So when people say escrow it is with an attorney not a title company.  Only real difference is that attorneys can have their own special way of killing deals that a title officer may not.  :)

Aaron Mazzrillo · Answer

You get the property under contract and then you assign your contract to another buyer. When you get the property under contract, you have equitable interest in it. You don't need to do a double close or any of that other nonsense. You get it under contract and either sign an assignment agreement in escrow or just have your buyer close as the buyer on the deal directly. Just be sure you have a great relationship with that buyer and your escrow agent.

Danny N. · Answer

ok got it! thanks

have you had any issues with seller's not seeing you as the final closer or seeing your assignment fee ?

Danny N. · Answer

@Aaron Mazzrillo,

Thanks for answering,but just help me understand this better using an example ( you being seller, me being wholesaler and bigger pockets being cash buyer).

If I Want to buy a house from you for 100k, I will make you a written offer, which you accept. Once I have that accepted offer of 100k, do I then proceed with an assignment contract, assigning my interest to , say, bigger pockets as cash buyer? And from that point does bigger pockets go and sign the actual Purchase and sale at closing?

OR

Do I proceed to sign the purch and sale , and then assign that entire final document to bigger pockets as cash buyer?

when EXACTLY do you assign ?

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