You have a buyer’s list…You find the property and write up an assignable contract with an inspection OUT clause of 10 days if no buyer is interested…
Question 1: How do you get your buyers into the house to show it during this 10 day period?..I assume they are going to want to do their due diligence
Question 2: It seems that assigning the contract and taking your $5K fee is the easiest way to get the job done…Is this correct?
You let the seller knows that you have list of buyers that will need to look at the house. They should not have a problem with that since you are an investor, but it is not pretty of course.
They have to let strangers in their home if they listed it through a realtor as well, so there is really no difference and you should not worry about it.
I don’t get the second part of your question. Are you asking if it is the fastest way to get paid? probably. it is one of them assuming your buyer closes on the house.
So you are upfront with them about the fact that you are just trying to assign the deal to others?..and if no one is interested, how do they feel when you pull out of the deal by using the inspection contingency or some other means?..I assumed that we were supposed to let them think that we were the buyer.
If we are to be upfront with them about assigning it to others, is there another clause we should have in the contract (a clause that states that if no other end buyers are interested in 10, 15, or 30 days that the contract is null and void?)…Is that possible to write in?
Most likely, you’ll have to find out what works in your area. In my area, we used to never tell the seller that we were “an investor.” It was a highly competitive area (south Florida) and investors were getting pretty brutal (I’ve had $30,000+ stolen away from me back when I fully didn’t know how to protect my deals). So, as far as the seller is concerned you ARE the buyer (hey, regardless of whether or not you’re assigning the deal, you are technically the buyer when you draw up an agreement, so you’re not “putting on” the seller if you say that). What I then told the seller was that I have a few people I work with who would provide the capital so we can get this thing closed right away (technically, this is correct too because these would be end buyers who would in fact fund the deal). That approach seemed to work well and I didn’t get too many follow up questions. I tried the “upfront” approach several times before about explaining how I was going to assign the deal, etc, etc, etc and the sellers in my area couldn’t get me out of the house fast enough. They wanted to work directly with the principal and they didn’t understand the value I was bringing by getting the whole ball rolling. So, I stuck with my other approach since it was technically correct and seemed to make more sense to the seller… Hope that helps! Good luck ;0)
That does help…thanks for your viewpoint
When purchasing and or assigns insert a long closeing date. I do let them know I am an investor and plan to sell. That is how I feed my family, seems to work for my sellers.I do not make a point to say I am going to assign because the contract they sign gives me that right. I do not make an offer unless I know that I am going to purchase or it wll be a no brainer to assign immediatley to some one else. The assignment fee is substantial, non refundable and I will only deal with an assignee that can prove performance. I do all asignments at the title company and require them to close on the contract that they buy from me at the same time in one sitting. Everybody wins ! Darin
Are you saying that you assign at the actual closing attorney’s office AT the time of closing?..I assumed that we were supposed to assign the contract, pick up our fee and let the end buyer follow it through
Here in Oregon We use a Title company and yes I arrange for the assignment AND closing on my contract by my assignee to happen at the same time.
Assignee’s who are not initiated handle all this better and I get a cashiers check. They go to one closing, I get cash,My seller gets satisfaction, we all win.
As far as getting potential buyers into the house…There’s plenty of reasons why you’d need access, appraisals, repair estimates, partners wnating to see the deal, potential renters, inspectors etc. If you have a contract on the home this should be problemo.
As for the 10 day inspection clause thing. I don’t know…to me 10 days might be cutting it to short. You could always put in a financing clause that says the deal is “dependent upon buyer obtaining financing from abc loan company” or something of the sort, which is honest and understandable.
- I have bought 5 or 6 homes that when I went through the contract holder told me to just say i am a contractor, or inspector of some sort, every major wholesaler that I know including myself uses this technique. It ties in great with the 10 day inspection clause.
The reason that I use a 10 day inspection clause over a financing clause is that you are trying to convince the seller that you are a strong buyer, what does that say about you when you tell them its contingent on financing rather than inspections. Inspections say that you are a due diligence buyer, where financing says you dont quite have you ducks in a row.
I put a clause in the contract that allows me (buyer), contractors, partners access to the property.
How exactly does this clause look. Could you send it to me?
I would be interested in seeing it too
The clause says that the buyer shall be entitled access to the property to show contractors, lenders, inspectors, partners, and other interested parties prior to closing.
Note: this is not to be construed as legal advice. For any legal advice regarding contracts, contact an attorney.