So I currently have a property under contract for 220,000 and an apprasial for 276,000. Is there a way that I can re assign my contract for 220 to a qualifed buyer for 276 and then just become the middle man and rep the 56k difference? I have a friend who has done this before and now I cannot get a hold of him, can you all please give my some direction? Thanks!
What you’re talking about is doing a double close. I’ve never done one, but heard they require a lot of coordination and you have to find a title company or lawyer who will do one. Also, you need to have a back up plan to be able to close yourself if your buyer bails at the last moment.
Actually what you are talking about is an assignable contract.
Most sales contracts are assignable. So technically you could assign this over to a new buyer for a higher value.
What you need to be aware of is that some lenders will not fund a loan for your buyer under those circumstances. It could be because of the increase in puchase prices amoung other reasons.
One of the other concerns is how you will be paid your profit. There are a handful of lenders that will do this transaction but they will not allow for your profit to be added on the settlement statement. Your buyer would have to pay the difference to you before or after the sale. This is easier to accomplish with smaller figures.
I’ve spent some time researching this concept. After speaking to roughly 20-30 lenders I finally found ONE who was ok with assignable contracts and agreed to consider paying out the assignment fee at closing.
So in this case your buyer would need to use this lender for their financing. I haven’t had the opportunity to do one of these deals yet but feel it could be a great resource to investors.
I agree that an assignable contract will work, but the difference from a double close is that the assignment fee is visible to the buyer. Maybe I’m wrong, but I haven’t come across many buyers who will pay much more than $10-15K on assignment fees and that is the very high end. $5K assignment fees are more the norm.
Well when i put it under contract i made myself and or asignee as the buyer. I personally know the person that i’ve asigned it to so that is no problem. I think that i have found a lender that will do it. I know that I am no the first person to do this so someone has to know the specifics. Is there any reason that i can’t make the assignment fee what ever i choose to, if the buyer and i are in it togeter? Or is there any way to word is so that those monies go back to my buyer and then we can work it out outside of escrow? Thanks for all your help guys!
Hey Ben what was the name of the lender that you found? I found a lady that said she would do it for me, however I was just curious to what the name of the lender was that you found? thanks,