Just starting wholesaling here in the state of Washington, although I have been a real estate broker for 18 years. In beautiful Washington, each real estate transaction is taxed (payable by seller) an excise tax of 1.78% of the sales price. If I can assign my contract to an investor, the tax will only be paid once.
However, If I am selling to an owner-occupant, I am a little leery about assiging to them, since they may get the idea that I don’t deserve any profit for my work, and try to go behind by back to deal directly with the seller. In that case, I would need to sign one set of closing documents with the original seller, and another set with the eventual buyer, resulting in two taxable transactions (according to escrow companies.) On a $200,000 house, that’s $3560 that could stay in someone else’s pocket (preferably mine.)
Has anyone had experience flipping properties to owner-occupant buyers ? Do they often get greedy, or is this a rare occurrence ? What are good ways around this dilemma ?
Thanks for any clues
Herb in Des Moines (Wa.)