:help Ok, here is my question. I need to know the steps to take to close a deal :help
I’m not familiar with title companies, escrow companies, working with lawyers to help close, etc.
I just need to know the steps. When do you do what?
Here’s are 3 scenarios:
Scenario 1: I find a seller willing to sell there property under market value. My intent would be to wholesale their home to someone that will pay more. Ok, I find that person who says they will pay more, now what? How does the assignment thing work. If I was to assign it to him for $5K Does the guy just send me the money and I send him the contract? Is it really that easy? Do I need to get involved with any escrow companies, or would he?
Scenario 2: Same as above, but what if they wanted to buy it outright. What’s the next step to close on this deal. I need specifics, so I won’t be lost when I do it.
Scenario 3: What do I need to set up for my tenant buyer if I was to do a lease option. They give me the option consideration fee, rent the home out for a year, and are ready to exercise their option to buy. Ok, so what’s the next step. Again, I need specifics, so I wont be lost. Please help.
Please addres all 3 scenarios… :help
If you can site yours sources, that would be great too!
I know these might sound like stupid questions, but hey, you dont’ know what you don’t know right?
Scenario 1: I find a seller willing to sell there property under market value. My intent would be to wholesale their home to someone that will pay more. Ok, I find that person who says they will pay more, now what? How does the assignment thing work. If I was to assign it to him for $5K Does the guy just send me the money and I send him the contract? Is it really that easy? Do I need to get involved with any escrow companies, or would he?
You need to always be active and involved. Here is how it works. You get a signed contract with you and the seller. You find another investor. You sign a separate assignment contract with that investor that he is going to pay you 5K for the right to your contract. You take all of this to your attorney or title company and they put it all together. You stay active in making sure that both parties show up for closing, your investor really has the funds to close, and that any title issues are being cleared up as quickly as possible. Then you close.
i agree with maccius a 100% never find the deal sell the deal and stand back and hope it will close check with the buyer and the title co often. get a tittle co on youre teem as soon as u can call one up make sure the do double closeing tell the u do a lot of business even if it’s youre first deal (this creats a seense of urgency)set up a evergreen account with them for youre earnest money the second u have a buyer fax the paper work. to them
If you are strictly assigning a deal to another investor then all you need to do is put the home under contract using your name and/or Assignees in the signature section of the box. I have found it helpful to disclose that this contract may be assigned to another investor, for profit or loss, on the last page of the Purchase agreement there is usually room left over.
Then once you assign the contract to your buyer get a NON-Refundable deposit from them. I like to make that deposit as high as possible or as close to the amount that I stand to make in the sale of the contract. ALWAYS be sure that their non refundable deposit is at least equal to the amount that you stand to lose if they elect not to close the deal
Once your contract has been assigned you are out of the deal from a legal aspect as long as everybody signed off. Assigning a contract means that you are assigning ALL of your rights and obligations on that contract to someone else. That is why I try to get as close to my full fee as possible up front in case they don’t close.
If your buyer does not close then seller has no legal leg to stand on in coming after you because he/she signed off that you are no longer obligated to fulfill your end of the contract. The new assignee has taken over all aspects of the contract.
I personally dont waste my time baby sitting deals with the title company, and sellers. I will call once a week to make sure everything is going OK, and let people know that if I can be of assitance that they could give me a call.
It may help to order preliminary title work, right after you put a deal under contract so that you can offer your buyers a sure bet that the home is free and clear of title isssues (this is not a necessity but your buyers will like you for it)
As far as tenant buyers on a lease option, you will want to collect the one years rent reciepts from them many times this could be a helpful bit in helping them obtain a mortgage if they are questionable. then as the time comes near to exercise their option have them get in touch with a lender, who does a mortgage, then you sell the property as usual. Not rocket science I promise