RE: “As far as your liability for specific performance, it depends on how your purchase contract is worded and what contingencies you have in place.”
What kind of wording would be good to use to eliminate or lower liability on assignments? Also since I’ve never done one, how do you go about carrying out an assignment of contract? Do you need an addendum to the original contract or do you put contingencies in the original contract to say that you will be assigning the contract? Do you use a seperate contract for the person you are assigning the property to? Thanks for all the outstanding help. Carolyn
I understand the difference between assignments and
wholsaling properties under contract. The former I am selling right to buy property, at specified price to an investor.The latter involves a double close with the title company.It seems to me that it is better assign a contract than it is wholsale a houses since you wolud not have to deal with the additional expense and hassle of the tile company. Is there a good reason to choose a wholsaling over
assignments. Am I more liable for specific performance
if I assign a contract and my assignee backs out?
I agree that assigning is better than doing a double-close, but some people are sensitive about others knowing they’re making a profit and how much of a profit is being made.
Since it is all a matter of public record, recorded on the county records, I don’t think it matters that much.
I’m currently studying to do exactly what you are talking about and here is my take.
I feel it depends on how much you will be making and whether or not you want to keep it confidential. Also whether or not you want the persons you are dealing with to know about each other. In an assigment everyone knows about each other and they also know how much you made. While a double escrow can be structured in such a way that will keep your profit confidential and the seller and buyer from knowing about each other, but you will have double the closing costs.
So basically you can assign the contract if you feel comfortable about everyone knowing your profit and each other. If not a double escrow with an experienced title company or R/E attorney would be you best bet. Also if you structure the deal correctly you could end up not paying any closing costs during the double closing.
As far as your liability for specific performance, it depends on how your purchase contract is worded and what contingencies you have in place.