basic question - assigning contract to my buyer

Bird Dogs, Wholesaling
1

i understand that you put a property under contract with “and or assigns”. i’ve never actually assigned a contract so i’m not sure how i actaully get payment.

if i put a home under contract for $200k and want to assign it to my buyer for $205k. what’s the process? does the seller see the home being sold for $205k? does my buyer just do a seperate agreement for me for $5k and then go to the closing table purchasing for $200k?

any clarification on this would be great.

thanks,
ryan

2

An Assignment of Agreement document would be used, between you and the assignee, stating the amount of the assignment fee paid. You receive your $5K, (or whatever the amount agreed to is), and the assignee receives his copy of the paperwork. You are now out of the deal, and $5K wiser for your troubles.

3

so essentailly he just signs his name to the contract for the original $200k and attends the closing? I have a seperate agreement where i just get the $5k and don’t have to show face by being “out of the deal”?

do i have that right?

thanks for the reply.

ryan

4

For the most part, yes, you have it right. The assignee has purchased your interest in the deal, and all the terms you had already negotiated. He is your fill in, so to speak. One you have your money and the assignment agreement signed, you are no longer a principal in the deal, and what transpires after that is between the homeowner and the assignee.

5

That is the best way, you trade that paper (assignment contract) for the actual Purchase contract. As I have suggested before, meet the person you are assigning to at his/her bank, WITNESS the request and drawing of the cashier’s check and have them deposit it in your new account with that bank to avoid any problem with a bounced check or a counterfeit check.

When the closing happens, the title company or attorney will, if the lender has a concern about an assignment, redraw the purchase contract with the new buyer’s name and the seller and buyer will sign that along with the other paperwork.

6

I have a follow-up question. Once you’ve assigned the contract to the new buyer, do you notify the seller that you have done this so he’s not surprised when someone else shows up at the closing? How do you notify the seller? Do you just call him and say “hey, so and so is going to close on the property”? Or do you have to send a copy of the assignment contract?