My .ORG address isn’t working. I guess Tucows is offline or something’s wrong.
But anyhow. On the Assignment deals, you’ll find that many investors do it a little differently.
Besides the info I e-mailed you, I thought I’d share some here for the other newcomers, since I don’t see anyone wanting to broach the subject.
Your Purchase Contract with your Seller, it should be for the price you’re willing to pay for the property. Not marked up for what you will charge your Assignee.
The way I handle the Assignment, is to use the Assignment Of Contract I sent you, tailored to my needs. On the face of the Assignment Of Contract, I put the amount of the deposit that was paid to me by my Buyer. But, on the Addendum that’s attatched to the Assignment Of Contract, I spell out all terms of our agreement. They include the name of the Escrow Agent that will handle the transaction. Also, the amount that’s to be paid to me (minus the deposit) at closing.
I also include that the deposit will be applied to the over-all price that the Assignee is paying me. And,that in case of forfeiture, the Assignee loses that deposit.
So, Diane (and others interested in doing Flips), YOU’RE the one that files the Assignment Of Contract with the Escrow agent. Don’t permit your Assignee that option. You need to close withy the Assignee at the same place you and your Seller close.
One other thing I do, that other investors might not do, is to have the Assignee sign a Promissory Note for the amount of the assignment (minus the deposit), and I reference that document to the Assignment Of Contract. It’s double protection for performance on the Assignee’s part. And, these documents are all attached to the Assignment Of Contract. It makes them (by being referenced to each other) a binding part of the over-all deal.
In your Addendum that’s to be attached to the Assignment Of Contract, leave no stone unturned. Is the Assignee to pay funds in CASH, or is the Assignment to be Financed by a lender? These, and other things need to be spelled out.
I’m new to this and would like to ask a few questions. When you are have the seller sign the purchase contract and when assigning a contract to a buyer, “Does the contract need to be notarized?” Also, "Do I keep the contract and turned it over to the title company until closing? or Do the investor keep the contract? and my job is done. I know I turn the purchase contract into the title company for examination. I’m not sure about the assignment contract. I hope this isn’t a stupid question. I rather be smart and do it right .
Have your SELLER sign in agreement of the Assignment Of Contract along with your Assignee and YOU. The Seller won’t refuse, because the Seller AGREED in your Purchase Contract to permit your “or my assignees.”
If you don’t choose to have the Seller sign the Assignment Of Contract, then have a WITNESS sign the contract made between you and the Assignee. I would also have the Witness sign the Addendum that spells out the rest of the terms, as well.
And one other thing on the area of the Assignee dealing for either CASH or Lender financing at the close. If the Assignee should opt for Lender financing, and the Lender fails to come through or perform, YOU will be stuck with NO ASSIGNMENT and forced to perform your obligation as agreed upon in your Purchase Contract. So, keep that thought in mind. However, most investors that buy Flips, they have the CASH, or are able to obtain it quickly. Those types of investors are the best ones to deal with. And, try to obtain the property with enough equity that you can pass a GOOD DEAL on to your Assignee. If you don’t, you won’t last long in the Flip business. Word gets around. That’s just my view on the matter.
Again, I wish you a successful venture! —Jack
If you need additional help, I’ll give you my best input. —Jack
—Jack