The contract should include the sales price between the seller and buyer/wholeseller. That is the price that is assigned to the buyer. However the assignment fee is a seperate agreement between both myself as wholeseller and my buyer? Correct?
ex. If contract is signed for 150,000. that price is assigned to buyer plus my fee for 10,000.
Therefore my buyer is acqually spending 160,000. Now if i was buying this property with a purchase agreement. an wanted to sell property to my buyer. would i need to do a double closing with another purchase agreement or an option agreement or exactly how would that work?
If you are buying for 150k and selling to your end buyer for 160k, you would have a purchase contract with the seller for 150k, and then have your end buyer sign an assignment of contract agreement assigning your rights in the purchase contract to him/her for 10k.
You only need to do a double close if the seller will not allow you to assign the original contract. Banks, for example, will not allow you to assign your contract with them, so you have to do a double close.
Make sense?
Steph :cool
Like steph said, it depends on who your end buyer is and how are they obtaining financing. Lenders will most likely not accept it and will want the buyer’s name on the contract. They dont like other party making so much money off of them. At the same time, some title companies do not like assignments and may not close on them.
Double closing is an option however:
- Title company may want to do the double closing on two different days (at least in Texas). They may not be willing to close on both at the same time/day for legal or for protection reasons.
- Some title companies will want written agreement from the seller that they understand it is being assigned.
Anyone knows how the title seasoning would play in double closing?
OK what do ya think about this. Get a contract between you and seller for 150K. get another contract between you and end buyer for 160K.
Go to closing and have title companys attorney prepare a contract between seller and end buyer. Have attorney prepare a release of prior contracts for the 10K spread and give you a check. call it a release of encumberance or something like that on the hud-1. No seasoning issues, no assignment problems, no double close. Simplifyed version as I read this somewhere here. Herbster
Hard to say it would work. The bank wants to see seasoning of title and will find out that the seller does not own the property. Some title companies use the ouble contract as an assignment, best way is to talk to a title company and ask them what would they like to see paperwork wise, some may have a trick up their sleeve
Fadi, exactly what do u mean by seasoning of title?
For example, for FHA financing they want to see that the original owners have owned the property for 90 days or 3 months. Then they will fund a new mortgage. Herbster
Thnks all that have responded.
purchase in the name of a trust and sell the trust.