Wholesaling Assignment Contract - Is this typical?

[Account Closed]

Good morning BP,

This weekend I have verbally agreed with a wholesaler to enter into a contact at a set price, lets call it $50k.  I will be seeking renovation financing for this property, so I will need the standard 10-14 day inspection period, and the financing contingency.

I received the Assignment agreement last night and wanted to run the language by some of you seasoned pros out there.

1. States the Buyer (Wholesaler) and Seller names and gives a legal description of the property.

2. "hereby assigns the rights to said contract": My name

3. "In exchange for compensation in the amount of $50k" (agreed upon PP)

4. "Assignee agrees to fulfill all terms, conditions, and contingencies of said Contract and to perform as required in good faith and within any time periods established by said Contract"

5. Signature Line

Here's my questions:

1. OK

2. OK

3. Does this language not sound like I am paying "$50k" for the assignment, and not for the property?

4. How am I to fulfill the terms, conditons, etc. of the Contract when I have yet to see it?

5. OK

6. Has anyone seen a inspection clause and financing clause inserted into the assignment agreement?

I am hoping an experienced wholesaler or buyer can weigh in here and assuage my concerns.

Thanks!

[Jeff Copeland]

I agree #3 doesn't make sense and may need to be re-worded.

Of perhaps greater importance, and related to paragraph 4, if the wholesaler in this case does not have a financing contingency and inspection period in his/her contract (and a financing contingency would be highly unlikely), I don't think you can add them via an assignment contract. The assignment just puts you in the place of the wholesaler on the contract for purchase and sale, based on whatever terms and contingencies he/she already negotiated with the seller.

You are correct - you need to see the original contract so you know exactly what you are buying with the assignment fee, and at what terms and conditions.

Sounds like you may be dealing with an inexperienced wholesaler. Caveat Emptor.