Hello everbody,
My ? is,
If I tied up a property for $100,000 and then assigned it to the end-buyer for $130,000 is the assiggnment fee going to be $30,000. And also how do I collect this amount at closing.
Thanks in advance.
Can anybody explain?
please!!!
You have a statement like the one below in your AGREEMENT FOR ASSIGNMENT OF CONTRACT:
Example 1: (Long)
“Upon the execution of this Agreement by Assignee and Assignor, Assignee shall tender to _______________________ the sum of $________ (“the deposit”) hereunder toward the assignment fee in the amount of $__________, the “Assignment Fee”, to be paid by Assignee to Assignor in consideration for the assignment of the contract set forth herein. At the closing of the Property pursuant to the Contract (the “Closing”), the original deposit paid by Assignor under the terms of the contract shall be reimbursed by Assignee to Assignor. If Assignee fails to close as provided herein and under the Contract, Assignor shall have the right, in its sole discretion, to terminate this Agreement and to retain the Deposit as agreed upon liquidated damages hereunder, whereupon the parties shall have no obligation hereunder.”
Example 2: (Short)
“___________________________________ (hereinafter “Assignor”), the Buyer under a contract
signed and dated , 20 (hereinafter “Agreement”) by and between
Assignor and ___________________________________ (hereinafter “Seller”), hereby assigns all right, title and interest in said agreement to ___________________________________
(hereinafter “Assignee”) for the sum and consideration of $____ , in which
$__________________ received as earnest money by Assignor and the balance of
$__________________ to be received by Assignor at closing.”
Example 3: (Optional Checkbox)
“___________________________________ (hereinafter “Assignor”), the Buyer under a contract
signed and dated , 20 (hereinafter “Agreement”) by and between
Assignor and ___________________________________ (hereinafter “Seller”), hereby assigns all right, title and interest in said agreement to ___________________________________
(hereinafter “Assignee”) for the sum and consideration of $____ [ ] received by
Assignor, or [ ] to be received by Assignor at closing.”
The copy of the contract pretty well explains what you asked about the assignment fee. I’d like to add that the amount you mentioned can be paid several ways. All cash at closing is best but if he doesn’t have it you can get as much as possible and take a 2nd TD on a property he owns or you could keep a percentage of ownership in the deal. For instance the the percent of the difference of assignment fee to value is 23% so you would keep 35% of the deal until he paid the entire 30K. this is kind of an off the wall way of doing it but is to illustrate that whatever is agreeable to both parties will work to make a deal.
Good luck,
donrock