Lets say you have a property under contract with an owner who is living in the home. You sign the contract and start marketing it. You have some interest from a couple who wants to look at the home. How do you explain that visit to the home owner?
My second question: What if the couple wants to buy it and they want to use conventional financing versus a cash deal? I know bank dont allow “assignment fees”
:help
AJ, I’ve heard that when you want to show a house, you should always invite MORE than one buyer at one time to show the house. This would create more interest if you think about it.
For the first issue, I’m up front and honest. I always tell sellers I’m probably going to assign the contract to another investor. Actually, I’m ising Flexible Option to Purchase agreements which allow me to market a seller’s property so I can find an end buyer. I don’t need any escape clauses. The agreement is good for so many days. If the agreement expires or the seller finds a buyer before I do, they can close without me. If I find a buyer first, then I submit a contract and assign the contract.
For the second issue, I mention in all my ads I’m looking for serious cash buyers that can show proof of funds.
AJ,
You have to put a clause in the contract allowing you to show the house. You should also have one allowing you to assign the contract to another buyer. I would advise you to try to do some type of contract modification if you think there is going to be a problem.
A cash deal is going to be hard to find so you may have to sell your contract. You’ll likely make less but if might be quicker and easier.
Good luck.
donrock
Im just trying to put myself in the buyers shoes. I would be very confused on whats going on. I actually would ask the home owner how much he selling the house for then question the other person about the mark-up(assignment fee). I guess this would only come up if the buyers are not invesotrs.
So I would turn down anyone who is using conventional financing? There has to be a way to get paid if its a conventional loan.
Im trying to sell my contract in the first place, so Im a little confused on what you mean when you say I may have to sell my contract.
You need to set the expectations from the beginning. Personally, I always let the seller know that I will be getting another person to buy the home. Most people don’t mind if you are helping them get out of their situation/problem.
As far as the buyer, they shouldn’t know until the very end that you aren’t the original seller. They will find out at closing because the seller’s name will be on the HUD. Show them the property without the seller there, and remove any signs that say FSBO or for sale.
Have this clause in your contract with the selle and make sure the seller understands:
Seller agrees to provide Purchaser access to the property, with 24 hour notice, in privacy, to evaluate or to show the property to appraisers, inspectors, contractors, potential occupants. Seller further agrees to allow Purchaser to remove any existing real estate signage and place an appropriate sign and advertise the subject property during escrow.
Walk through the property with a video camera. Upload the video to a website and then email your buyers list with the link to view the property.