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Author Topic: first flip, not sure about contracts  (Read 3991 times)

Offline Dee-Texas

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first flip, not sure about contracts
« on: October 12, 2004, 07:17:34 pm »
Hello All,
It's the first time I've done a flip and I'm not sure about the contracts. I have an option to purchase a property with my seller. I have 60 days to sell. I think I have a buyer but their banker wants a signed contract from them to see if he will fund the deal.
I could get a purchase agreement with the Seller but I don't want to double close unless I have to.
My questions:
Should I also have a TREC contract with my sellers? (even though I have an option contract?)
Do I make a TREC contract with the buyers and put the total for the house that includes my assignment fee?
Then do I write up an assignment fee between myself and the buyer?
I've got about 3 courses that skirt around the whole situation and nowhere does it tie in the option to purchase.
Hope ya'll can help. Of course I'm in Texas.

Offline tedjr

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Re:first flip, not sure about contracts
« Reply #1 on: October 12, 2004, 08:51:49 pm »
Howdy Dee Texas:

The more paper bankers have the better they feel. They must use it for Christmas as they get no presents.  Ha Ha. I would give get your buyer to sign a TREC contrcat for the banker. Tell your buyer that you have an option on the house. Actually a contract is not much more than an option for the buyer any way. I would include the option fee in the price as well.

The contract with the sellers is not really necessary. I do not see a problem in getting a contract either but not really a need.

If you have a contract  with the buyers including the assignment fee that is all you really need to close the deal.

You may talk with your title agent also and ask the same questions. They may have a simpler way to do the deal and save you from a double closing.

Another idea just came to me. You could just do a TREC with the seller and an assignment agreement with the buyer and give the banker a copy of each agreement. This may actually be easier and less confusing. I do not think the banker will care just as long as the buyer has the property under contract some sort of way.

I have probably confused you even more. As always seek advice some smarter folks than me. Hope I helped
Ted P. Stokely Jr

San Antonio, Texas

Offline Dee-Texas

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Re:first flip, not sure about contracts
« Reply #2 on: October 13, 2004, 07:03:12 am »
Thanks Ted for your reply.
My sellers know that I have an option only.. but if I need a contract they have no problem with that. My buyers think I own the property, which I guess I do in a way if I excercise the option. I want to streamline this for the banker and the buyer. What I really wanted to do was this:
Keep my option with the seller, write up a contract with the buyers with my name as seller and then when the deal goes to the title company give my assignment to the title company.
Would this work?
In my area the bankers see options or assignments for oil properties all the time so there's not a problem with the assignment or option, I just don't want the buyer to carry around the assignment with them to the banker.
I want the title company to take care of all of this.....to me I would think it's just paperwork like getting a clear title, survey, etc.
What do you think? Others?

Offline Flipper

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Re:first flip, not sure about contracts
« Reply #3 on: October 31, 2004, 01:43:46 pm »
That would work Dee...keep the option with the seller,then sign a Purchase sales contract for the property for the amount you have agreed on...then have the buyer sign a Purchase sales contract for the amount they have agreed to purchase along with an addendum stating you are not the owner of the property...that it is "under contract" and that they are not permitted to discuss the deal with owner. If the House is Vacant tell owner you need key to show house to your partners ect...if he resides in the property just tell him you will be showing the house to potential buyers. It's best to disclose everything. Anyway,...tell the title companies attorney you want a simultaneous closing(Collapsed Closing-don't let them charge you for each closing...if they try find another title co.) Have the buyer deposit amount in escrow and have the seller of the Property show up to sign papers at a certain time and he'll recieve his amount,you hold title to property,then have the buyers show up to sign a couple of hours later...and and sign over title to them. They become the new owners and the balance left in escrow is yours. Make sure seller pays closing costs or buyer/seller split the costs. Just my two cents worth. 8)

 




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