Hello
The Colorado approved real estate contract has a non assignability clause. Is it legal to delete this clause prior to submitting an offer.
John
Are you presenting an offer thru a Realtor(r)? Is so, then no, you cannot legally (or rather, the agent cannot legally) just delete the clause from the contract for presenting the offer.
However, you can strike through the clause and initial/date the change. The sellers would have to initial/date the change as well for it to be valid.
If this is a bank-owned property, don’t bother as they likely will have their own purchase and sell contract for you to sign and they will not allow you to assign your contract, period.
Raj
the agreement is between the two parties. They can agree that the contract is assignable or not. They can agree that to whatever they want. Nothing illegal about that.
However, as Raj points out, banks usually don’t allow it. It’s not illegal, they just don’t like it.
John,
All that being said and correct think outside the box! I put the contract in my name and want to give it to another investor .
Lets Role PLAY this: you be John Investor and I am Robb Flipper
Robb: Hey John this is Robb the guy buying your house I have some great news for you and some great news for me to tell you about…
John: What is that?
Robb: The great news for you is we are closing on the same day I said at the same time for the Same PRICE!! The great news for me is I have a investor friend that can get a better loan then I can at a great rate allowing us to cash flow better and he is going to buy the property from you is that O.K. with you?
John: Yes that is fine
Robb: I need to change page 1 and 10 of the Colorado Contract to his name and I will fax that right over if you could just sign and return!
John: Wow Robb you are the MAN and If I ever win the Lottery I want to give you half of it!!
(O.K. so the last part was made up)
John this also works on Bank Owned property face the fact no Seller in there Right mind will ever turn down a contract if it is the same price for the sameday!
or you can buy contract for it with an LLC and then sell the LLC. Takes a savvy buyer to know how to handle it, but it works.
Hey Mark as a CPA would you recommend doing that with a LLC or an S-Corp?
won’t matter. regular income to you either way.
I thought it was just an easier transaction with a S-corp!
just a contract for sale either way.
I strike out and initial the non-assignability clause. Make sure the seller does, too.
In addition to that I use my name with the word or assigns after it where it says buyer.
Ie Jon Smith or assigns.
I just do that automatically on every deal. On some occasions it is questioned, I just say I may be adding an out of state relative to the deed and don’t want to create a rash of unnecessary amendments and faxes between buyer, seller and relative.
Then if you decide to assign the contract you create and assignment letter (I have an example, just ask if you want it.) and assign it to anyone you choose.
Additionally, if you didn’t strike out the clause, you can still assign a contract after it is executed … you just need seller’s permission… Tough but not impossible.
So yes, it is legal if the buyer and seller agree and properly document.
Yeah that works always has worked there are just way to many sellers that will not allow it mostly all Banks.