All Forum Posts by: Ray Eason

First, remember, I'm not an attorney...that said:

While I wouldn't use the phrase, "selling the contract," that's essentially what you're doing.  More precisely, you're "assigning the contract for a fee."  Assigning a contract is completely independent of selling the contract -- you can assign a contract without getting paid (in fact, in many non-real estate cases, it might make sense for you to pay the other party when you assign a contract to them). 

Basically, assigning a contract means that the assignee (the person who takes the contract) now steps in and assumes all conditions of the contract from the assignor (the original contract participant).  He replaces you in the contract, exactly as it's written.  It's no longer your contract; it's his.

Who opens escrow is between you guys.  Ultimately, it's his contract now, so he's going to want to be involved.  But, as the wholesaler, part of your service to him could be handling the closing details.  Also, keep in mind that the seller is now legally under contract with the new buyer, not you.  So, make sure the seller has the necessary information about that situation (whatever that information may be).

As for who signs the contract, you need to sign it to make the agreement legal.  Until you have a signed (executory) contract, you can't legally assign it (you don't have anything to assign).  Once you have a signed contract, you have a legal agreement you can assign.  

As for your question, "What are the actual steps for this process," which process are you talking about?

First, anything you've read from real estate sources (i.e., non-attorneys) on legal stuff should pretty much be ignored... (including what I'm about to write :-)

I'm pretty sure assignment of contracts is part of common law, so it wouldn't be state specific.  And from what I've read (from legal sources, not real estate sources), assignability of most types of contracts is the default and only disallowed if expressly prohibited by the contract itself.  I believe real estate contracts fall into this category.  So, if the contract doesn't say you can't assign it, you can.

Though again, I'm just a guy who knows just enough about the law to be dangerous, so don't take any of that to be authoritative...

The title company is who handles all the paperwork, creates the settlement statement, ensures a proper deed is created, signed and filed, as well as handles all the funds from both parties.  Unless you are comfortable doing all those things yourself, you'll use a title company (or closing attorney, depending on which is legally required and/or customary in your state).

Most standard PSAs have 'no assignment' wording in them. Line that out and initial,  but still add 'and/or assigns' after purchaser name to cover your bases.   Here in WA assignment is crucial.  Double close means excise tax (1.6%-ish) X 2!  Your whole fee will be eaten by the state!    

@Ray Eason You will need to make sure that your contract shows the buyer as "Yourname or Company and/or Assigns" in order to make a contract assignable.  You will then only need to complete an assignment contract to assign the contract to the end buyer.

Actually, I don't believe that's true...

I'm not an attorney, but I believe that contract law in the US makes assignability of most contracts legal/valid, by default.  So, as long as the contract doesn't say that you can't assign, you should be able to assign even without the "and/or assigns" addition.

you Do so by assigning your contract to your cash buyer 

 Why not just assign the contract and do zero closes?

Generally speaking, now is the time to find a buyer.  Make sure you have permission from the seller before you just "give out the address," but if you can find a buyer relatively quickly, you can open escrow after that once you know who the buyer will be.