How to Assign a GA RE Contract...

[algreg]

Hey guys,

I’ll be putting my first few properties under contract this week and was hoping someone could lend a helping hand.

I have a bunch of courses (just like most of us) and they all give me their very simple contracts. However, I plan on flipping properties from the MLS and don’t even want to bother Realtors with any other contract than the official GA contract.

On page 6, section 19C under Other Provisions it says and I quote:

“This Agreement constitutes the sole and entire agreement between the parties and shall be binding upon the parties and their successors, heirs, and permitted assigns. No representation, promise, or inducement not included in this Agreement shall be binding upon any party hereto. This Agreement may not be amended, modified or waived except by the written agreement of Buyer and Seller. This Agreement may not be assigned by Buyer except with the written agreement of Seller. Any assignee shall fulfill all the terms and conditions of this Agreement.”

I have two ways to do this transaction, either assignment or double close. I have transactional funding from the course I got so a double close may not be such a bad idea. But what if I wanted to assign it? Could I?

By the way, my buyer already knows that the properties are on the MLS. He doesn’t care. He told me that if I gave him the MLS number he would only give me a birddog fee, something like $500. But if I do all the work and the negotiating and bring him to the closing table, I can make as much as I want as long as it comes in lower than his number.

I chose number 2 because I want more money. But I also want to learn this. Not only that, but I will earn this man’s respect by bringing him 6 or 7 properties packaged and ready to go in a matter of days.

Once I do it and get to the finish line, I can ramp it up as much as I want. The listing agent wants prequal letters or POF with offers. I don’t have much money for earnest money so I’ll probably do 10 or 20 bucks a property. It’s a total of about 6 or 7 properties.

Any feedback would be greatly appreciated.

P.S. I think I’m supposed to open title once the offers are agreed upon and I don’t know how to do that just yet but I don’t want to get ahead of myself. I’ll ask that question on Wednesday or Thursday after I have all the contracts in hand.

Thanks in advance for all the help.

[Gold_River]

Hi,

To surcumnavigate the assignment clause in a contract write it with "Gold River and / or Assigns" as when and if the seller signs it with your name written in this matter the seller is granting you the right of assignment!

Now banks, mortgage lenders and the federal government may have a problem with this clause as it basically implies your going to potentially assign your contract and these entities may prohibit your purchase with the right of assignment!

With a contract written through a real estate agent I think you will find there broker demands a larger earnest money requirement in line with there states “Board of Realtors” guidelines!

I generally only get to do a $5 or $10 earnest money deposit in transactions directly with the seller where there are no realtors involved!

I would be very careful to completely understand what your investor buyer seeks as his / her criteria is important to your potential success! As an investor I have people send me stuff all day long, only the best of the best warrant my review and due diligence and I maybe only make offers on a few of those!

You can get a generic “Proof of Funds” letter online through a transactional lender!

                   GR

[nsu1997]

@algreg post:1

On page 6, section 19C under Other Provisions it says and I quote:

“This Agreement constitutes the sole and entire agreement between the parties and shall be binding upon the parties and their successors, heirs, and permitted assigns. No representation, promise, or inducement not included in this Agreement shall be binding upon any party hereto. This Agreement may not be amended, modified or waived except by the written agreement of Buyer and Seller. This Agreement may not be assigned by Buyer except with the written agreement of Seller. Any assignee shall fulfill all the terms and conditions of this Agreement.”

This reads that you can assign it as long as the seller is ok with it. You could then do what Gold River suggested, or simply tell the agent upfront “hey I have a money partner that’s actually gonna be the one bringing the money and closing on the house, I’m sure you & your seller could care less as long as it closes, so could you get your seller to put in writing that it’s ok if I assign it to my guy that’s bringing the cash to closing?”

@algreg post:1

I have two ways to do this transaction, either assignment or double close. I have transactional funding from the course I got so a double close may not be such a bad idea. But what if I wanted to assign it? Could I?

By the way, my buyer already knows that the properties are on the MLS. He doesn’t care. He told me that if I gave him the MLS number he would only give me a birddog fee, something like $500. But if I do all the work and the negotiating and bring him to the closing table, I can make as much as I want as long as it comes in lower than his number.

Gold River’s strategy will work as long as the seller and the Realtor(s) involved don’t care. If the property is REO you can forget it.

Another strategy would be to contract the house in both you and your buyer’s name then agreeing to remove yourself at closing for the assignment fee.

Or you could buy the house in a land trust, then assign the beneficial interest to your buyer for the fee.

In any case, here’s how you stand a better chance at getting him to agree to an assignment fee higher than the $500 token birddog fee: when you find a deal, negotiate a lower price than what it’s listed at. Then add your fee on to that price, ensuring the grand total is LESS than the house was listed at. Example if the list price is $100k, negotiate with the seller to say $94k then you can tack on $4k or 5k and still come in under list price. I don’t believe him when he says he’d pay you MORE than it’s listed at…he’d probably just wait you out and close on it himself, then as Gold River stated you’d be out of earnest money, which will be a LOT more than $20 on listed properties.