Assign Everything?

My exit strategy is to wholesale to a retailer.

Let’s say that the seller and I agree on an offer and we both sign the contract. I have the seller a limited power of attorney letter, plus a letter of authorization to their lender for me to look up their mortgage information and all of these are notarized.

Since I will be wholesaling it, do I sign all of the documents “and/or assigns” so that whatever document I sign with the seller also transfers to the retailer that I assign the contract to?

Or will the retailer have to draft their own documents, like the limited power of attorney and the authorization letter to the lender, once they buy the contract from me?

Hi - How are you doing?

If you are buying subject to - your agreement of sale will have a subject to existing mortgage clause and also where it says your name as buyer - it should include - and/or assigns. By having that clause, you have the right to assign the agreement to someone else. So if you find a buyer, you will just do an assignment agreement (separate form) with the new buyer - assigning this particular agreement of sale to him. The original agreement of sale and the assignment will become one document and that can be stated on the assignment agreement.

The new buyer will probably be paying cash or have a loan in place to pay off the existing loan, etc. Or at least that’s the game plan in doing this. There should be only one closing as well. You are basically the middle man - kind of like a mortgage broker who finds the money and puts two people together.

There are many ways to “own” the interest or “own” the house - using either a Quit Claim Deed or Warranty Deed. I’ve been told that a Warranty Deed is best because it conveys Title not just an Interest in the Title.

HTH a bit…

I’m confused by the post, rkmin.

A wholesaler doesn’t worry with the mortgage balance of the seller and doesn’t need a power of attorney from them either.

As a wholesaler you are playing a numbers game. You have to contract/buy and assign/sell more deals than a retailer to make money, which means you should be making tons and tons of offers. If you are talking with the seller’s lender(s), negotiating SS’s, getting POA’s, etc. then you are wasting alot of time.

Moreover, you are also probably not getting deals good enough to flip to a retailer/rehabber.

Raj

Thanks for the reponses.

[RogerJ wrote:

“A wholesaler doesn’t worry with the mortgage balance of the seller and doesn’t need a power of attorney from them either.”]

If I don’t worry about the mortgage balance, then how will I know if there is any equity in the house to determine if it’s a good deal or not?

Since I’ll be wholesaling wouldn’t I need to:

  1. run comps
  2. estimate repair costs
  3. get the seller’s loan balance information to determine amount of equity in property (seller authorizing me to contact their lender)
  4. run a title search for any other liens or judgments
  5. make offer
  6. sign the contract
  7. assign contract to retailer

Also, when would I need a “power of attorney” then since I’m not at all familiar with this?

Thanks for the help.

If I don’t worry about the mortgage balance, then how will I know if there is any equity in the house to determine if it’s a good deal or not?

Simple. The prop’s ARV is $100K with $20K estimated repairs. You say, I’ll give you $40K for your property today. If they say okay, there’s enough equity!

[b]Since I’ll be wholesaling wouldn’t I need to:

  1. run comps[/b]
    You need to know the aprox. ARV value, either through comps or knowledge
    2) estimate repair costs
    rough estimate only of needed repairs because someone can rehab to their money runs out!
    3) get the seller’s loan balance information to determine amount of equity in property (seller authorizing me to contact their lender)
    If you’re having to worry about this, then there isn’t enough equity in the property to buy it wholesale and resell it to a retailer. Make offers. They’ll either take them or not. Make LOT’S of OFFERS!
    [b]4) run a title search for any other liens or judgmentsb/]
    Only AFTER it’s under contract. No need to spend $$$ on something that you can’t buy yet.
    5) make offer
    Make offer FIRST!!! No need to jump through a ton of hoops unless you’ve already received the bone!!!
    6) sign the contract
    Directly after seller accepts offer, which should be up about one or two on your list.
    7) assign contract to retailer
    Only if you’ve made an offer good enough that a retailer/rehabber will want the deal.

Also, when would I need a “power of attorney” then since I’m not at all familiar with this?
You won’t need one. The seller will sign for themselves, you’ll sign for you. Besides, there would be an easy conflict of interest (and therefore, a voidable contract) if you were to use a POA to sign for the seller in a deal where you were the buyer.

Raj

I wouldnt play middle middle man…it’ll get you in trouble…Just sell it once as a wholesaler… Don’t let your buyer wholesale it… Seroiusly, check the courts in King County & you’ll see… All the power of attornies & signed agreements mena nothing when the AG gets you…Ok…have fun Jim (KIng County Washington)

Powers of Attorney…

Keith