Posted by B.L.Renfrow on April 12, 2000 at 09:22:06:
Depends on the FMV of the property; you can’t just pick a number out of the air, like $8000…besides, the typical assignment fee is more like $1-2k.
Now, if the property is worth, say $78k, and you have it under contract for $70k, then I see where your $8k figure is coming from. In that case, the buyer gets a loan for $78k less their downpayment. The amount above the $70k sale price is shown on the closing statement as a mortgage discount or assignment fee or whatever. Good luck finding a lender that will do this, however…particularly if the buyers have any credit issues. Might be better to create and sell a note, or you could take your $8k in the form of a note.
Assigning The Contract to the Buyer. - Posted by K.Williams
Posted by K.Williams on April 11, 2000 at 19:28:22:
Hi Everyone,
I needed to know when you are trying to assign the contract with a buyer, what do you tell the buyer when you are assigning the contract to them to get a simultaneous close? Thank you everyone for you help.
Re: Assigning The Contract to the Buyer. - Posted by JoeKaiser
Posted by JoeKaiser on April 11, 2000 at 22:39:56:
You assign contracts so you don’t have to do a simultaneous close. By assigning, your buyer steps into your shoes and does your deal with the seller himself . . . so only the one closing is needed.
If you assign a contract to a new buyer & they only have limited funds for a down payment, how would you structure somehting like this?
Example: You get a SFH under contract for, let’s say $70,000 & let’s say you assign it to new buyer for $8,000. How would you get something like this financed if the buyer only has say 3 or 5% of the purchase price to use as a down payment?
If the buyer only has, let’s say 5% to use for a down payment, that means they only have $3500 to use for a down payment - just enough for the $70,000 sale. In this case, how would they be able to give you your $8,000 plus have enough cash to go through with the sale? Would you just take a note for your $8000? or is there another technique?
a 3% - 5% of down is enough to get a mortg. - if necessary add closing costs (usually 6% of sales price is allowed on fha deal or 3% on conventional)to the sale price Remember the house must appraise
TRY TO GET A RIGHT TO ASSIGN AND A MORTG. CONTINGENCY IN THE CONTRACT (VERY DIFFICULT) if you get these 2 search for a bank that will alolow a flip on a canventional deal or on an fha deal (your new buyer will most likely go thru one of these) emphasize to your bank or mortg broker how you will structure the deal and get their agreement - i have seen banks “promise” that they can do it, then do an about face - once you have the buyer you may be able to use their down pymt as your down pymt since the check will be made out to ther sellers atty.
if you cannot get a mortg contingency you are taking a bigger risk - in this case look to carry a second or get a longer closing period (min 60 days but prefer 90 days) to allow you time to search for the bank and to close