Assignment contract + deposit on orginal contract question...

General Real Estate Investing
1

ive done quite a few wholesale deals. one thing that i have taken for granted is the deposit on the original contract, but i do not have a concrete answer on this one.

i leave a signed check for $500 at the title co’s office. this is on file and reserved for pending contracts that i have offers on. usually the deposit doesnt get factored into the equation. for example, my assignment fee of $5k is always $5k. i have had 2 situations where the end buyers attorney has asked “what about the deposit? doesn’t this get included into the assignment fee?” if that were the case, i would have made the assignment fee $500 more than what the assignment fee was for.

how is this usually handled? who gets the rights to the deposit on the original contract? should the assignment fee include the deposits to avoid getting less money?

2

what does the contract say? that’s the binding document.

3

it says the contract is applied towards the purchase price.

4

a deposit is like earnest money. I would say it goes with the contract. If I were to assign the contract, I would need an assignment fee equal (at least) to the earnest money I had in the deal to break me even.

It would be credited to the new buyer at closing, to break them even.

But I’m not an atty, and this should not be considered legal advise.