I would like to have a contract set up so I get paid at closing. That way I never assing a contract for 5k and then my buyeyr never closes on the house because of heavy leins that the seller can’t sell for the agreed price or major work that my buyer can not afford to do. That way my buyer does not spend 5k on a contract for a house that ends up not being an investment and has to back out loosing 5k.
In half of the posts, the advice is to be paid for our assignment fee at the time of assignment and that we should be paid regardless if the buyer goes through with the deal (if the seller backs out, the fee is to be refunded however).
In the other half, the advice is that a “smart” investor would not pay until closing.
I fail to see why someone that has run the numbers and done the due diligence enough to accept the assignment would not want to pay the fee when it’s signed over. Once I sign my contract over, I am out of it. I can do the memorandums and all that, but why should I have to? I don’t have interest in doing business with someone who is unable or unwilling to pay me for the deal I’ve brought them when I sign it over to them. If I am going to wait for closing to get paid, I might as well do a double close and make more money.
If you are worried about an investor not paying at closing, the assignment fee, than yes best course of action is to file memorandum which at worst takes an hour of your time to do.
But the most important thing here to remember is, that if he/she doesn’t follow through on your assignment fee, you will never do business with that person again, right? LOL
I know, not a pretty answer, but it’s just one deal. Have more than one in your pipeline and if someone tries to “screw” you remember who it is and wear a sign at your nest REI Club Meeting that says “SO AND SO UNSCRUPULOUS INVESTOR DIDN’T PAY ME”
LOL…I only am kidding about that.
Seriously, yes, after assignment you are out of it, but wouldn’t it be prudent to just request a small fee upfront and rest in escrow?
I may not have the best answer; anyone else have something better, I humbly ask for clarification from those on this board.