I just wanted to post my Sales contract (taken directly from the Kris Kirschner wholesale program) and Assignment contract (got from another wholesaler in my area in TX) before actually signing them in deals to see if there is anything that should be added or removed or if they’re ok!
Purchase and Sale Agreement
Purchase and Sale: The parties to this Agreement are ___________________________________________, hereinafter referred to as “Buyer”, and ___________________________________________________________, hereinafter referred to as “Seller”, which terms may be singular or plural and include the heirs, successors, personal representatives and assigns of Seller. Buyer agrees to buy and Seller agrees to sell that real property located at __________________________________________________________, _____________________, _______, ____________________ being located in __________________________________County, _______________________, and being more fully described in the records as they are recorded in the ___________________________County Court House (hereinafter referred to as the “Property”).
Purchase Price: Buyer agrees to pay Seller and Seller agrees to accept ________________________________________________________ ($_____________) in cash at closing for the Property. Buyer has paid to Seller an earnest money deposit of $, which shall be credited to Buyer at the closing of this Agreement. Property taxes shall be prorated as of the date of closing.
Title: Seller warrants that Seller has good, clear and marketable title to the Property, subject only to property taxes and any easements and restrictions of record. Seller will convey title to Buyer with a General Warranty Deed.
Buyer will inspect title to the Property and Seller will satisfy any encumbrances other than those listed above.
Closing and Possession: This Agreement will be closed on or before 30 days after acceptance of agreement and be extended as necessary to complete all paperwork required. Time is of the essence of this Agreement.
Closing Cost: Buyer will have Buyer’s attorney, at Buyer’s expense, prepare all required documents to complete this Agreement.
Inspection: This Agreement is subject to an inspection of the Property and approval by Buyer and/or his associates after acceptance of this Agreement by Seller. Buyer will buy the Property in its present “As Is” condition.
ADDITIONAL TERMS, CONDITIONS OR EXHIBITS:
A… Seller represents that there are no parties in occupancy other than Seller and Buyer will be given occupancy at closing. Any belongings, furniture or fixtures on property after closing shall be considered as abandoned and Buyer shall have the right of disposal of same. Any tenant, if appropriate, shall be terminated and shall have vacated the Property prior to the closing of this Agreement, unless otherwise agreed to by Buyer in writing.
This being the entire Agreement between the parties, they approve this Agreement on this _____ day of ___________________, 2003.
Good point. Where should I put it in this contract? Is this a good spot:
Purchase and Sale: The parties to this Agreement are ___________________________________________, hereinafter referred to as “Buyer”, and ___________________________________________________________, hereinafter referred to as “Seller”, which terms may be singular or plural and include the heirs, successors, personal representatives and assigns of Seller. Buyer agrees to buy and/or assigns and Seller agrees to sell that real property located at __________________________________________________________, _____________________, _______, ____________________ being located in __________________________________County, _______________________, and being more fully described in the records as they are recorded in the ___________________________County Court House (hereinafter referred to as the “Property”).
No, I’m looking to assign wholesale deals and do double-closings using these contracts. If I can’t find buyers, or if for whatever reason the deal falls through I simply want the contract to fall apart and only lose earnest money (NOT be stuck with a property).
Are you saying that this sales contract doesn’t allow me to return the property to the seller if I can’t sell the property?
Ok, after reading some more I want to get some more clarification. Any advice is greatly appreciated!!
Can someone please let me know if my P&S agreement is "good enough"OR if I should switch to the standard TREC 20-7 contract?? To be honest, I LIKE the shorter and less complex P&S I posted above, BUT if it doesn’t cover my a$$ then I’d rather use the TREC.
I want to add “and/or assigns” to my contracts. Where exactly do I add this to TREC contract and my shorter version contract above?
I do not yet have an addendum. Can anyone PLEASE send me what you have as clauses in your TREC OR send me your addendum?? I have searched for this thing all over the forum and can’t find a FULL addendum. All I’m finding are bits and pieces all over the place without specifics!
I appreciate the quick help! I’m trying to get this thing rolling as quickly as I can and am tired of waiting an extra week to get started, then an extra week, an extra week, etc… The sooner I verify I have everything I need in order, the sooner I get started. I want to actually begin my marketing/advertising by next week, so it’s crucial I get all my contracts and info verified so it’s not a bottleneck!
Buyer and/or assigns agrees to buy and seller agrees to sell.
The way it reads now the agreement the buyer agrees to buy and/or assign the property. A careful reader isn’t going for that. The revision should imply that the buyer or whomever the contract is assigned to agrees to buy the property.
I cannot comment on your short version of the contract, I would recommend a real estate attorney looks at it personally.
If using TREC contract, you can do two things:
As buyer, you put “Your name/company AND/OR Assigns”
You use an addendum that details the assignment option and have the seller signs it blank, and you fill it out later when you find a buyer.
As far as the first option goes, some title companies may balk at it while others may not have a problem with it. Personally I think thats a homework investors need to do… talk to title companies or other investors who buy wholesale deals.
Second option is what I usually do even though I never assign my contracts… I get it signed just in case. The second option also allows me to detail the assignment fee, rights,…etc. I use a copy I got from R2SRealEstate.com forms class they teach.
These can go under pragraph 11 of TREC contract you do not need an additional addendum, or you can place an additional addendum. An addendum could be a plain page stating anything you like just give it a title, and if using TREC contract just reference it under the addendum section of the contract as Other by title.
As far as the class goes, it is in person class. It only costs $99 for a 2 days bootcamp on how to fill out the paperwork so take a trip down to houston or san antonio and attend the class.
I use the TREC contract b/c I know I don’t have to get an attorney to ok it. I use “and/or assigns” & I put an addendum that says that as the buyer, I’m entitled access to the property to show lenders, contractors, inspectors, partners, and any other interested parties prior to closing.
This is what I plan to do. Did you simply hand-write “and/or assigns” on the TREC or did you edit it on the computer?
Also, on the addendum, what other clauses did you add? The most popular ones I’m seeing are:
“inspection clause” the one you mentioned about permitting buyers access to the property (this one is already in the TREC contract (section 7A). How are people using this as their out clause? Are you simply adding to this clause on the addendum by saying “I can withdraw my offer if my inspection is unsatisfactory?”
seller will allow lock box
seller will allow signs in yard
buyer can use choice of title company
seller will give a copy of key, so buyer can show property
will close on or AROUND 30 days but not necessarily by the 30 day mark (in case you can’t close in time and need a few more days).
Thanks for the help fadiz. I think I’m going to use an additional addendum page so it’s typed out and neat. I found the addendum section (section 22) in 20-7 TREC, but am wondering which addendum check box you are using in this section?
You are really over complicating it. Motivated sellers are not regular sellers and will work with you to sell their house.
Now, if the house is not vacant, they may have a heartburn to give you a key or install a lockbox depending on the situation. If the house is owned by a single female, or they have a babysitter or older children babysitting younger children, do you honestly want to demand a key or unannounced access to the house?
Stop trying to make it a perfect contract… each deal is different, write the terms you agree on with the seller under section 11. They do not need to be “neat” and have their own addendum.
Heck, I never fill out the closing date on the contract and I leave most of it blank and fill it out later if need be.
Don’t over sell it and don’t stress over it. Just fill out the important parts and ask them if they don’t mind allowing your buyers and/or contractors access at a later date. If they don’t, then move on.
wow, ok. That makes sense. I do understand what you’re saying about section 11. I guess I was just looking at it from a CMA and legal standpoint. I didn’t want to actually sign any contracts until I get nailed down.
Ok, I think you’re right then. I can just tailor each deal accordingly. That will save me some time/money in waiting for contract work to be done.
On that note, I think you just simplified my outlook on the contracts. I do need to make sure I have necessary clauses like an “out clause” or an “and/or assigns clause” though right? What other clauses are absolutely necessary on each contract?
Thanks again fadiz! I really appreciate your help here! I feel so close to getting started! :bobble
I see, I found the paragraph. This is probably a stupid question, but why would you do 15 day option period since typically you’re trying to close within 30 days? That way, if you can’t find a buyer within 30 days you can terminate?
I use $10 to $20 option for 20 days usually. The reason is because if you can’t find a buyer by then, what is the point of having longer period? you can make it any length you like. like rgc said, option is all you need in TREC contract.