Can someone please telll me the step by step detail on how to do an assignment?
I know to sign my offer as name and/or assign, but what after that? How does this work..
I found a killer deal, but I cant afford it so I want to assign it to someone how can for a profit.
Thank you,
D
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Don't Wish the Past, Create the Future! - DH
Do I the Investor that is assigning the deal over to the other investor need to call the escrow company???? or do the people that are buying it from me??
Don M!
Donald Myers
After you have your purchase agreement signed I would go to Dean's forms and docs. I would print the assignment of contract with your new end buyer as the assignee and you as the assignor. On the contract you will see a spot to put a compensation price. This is were you make your money. You are selling a contract to a buyer. You need to come up with a good fee. I have seen $1000-$5000 and $10000. Good Luck
I agree with all that jmcquarrie states. He seems to be a very wise official coach. The only thing I would add is that I would have your Power Team Real Estate Agent ask his/her broker to review the assignment contract to see if they feel that said contract has sufficient legal language, according to the state in which the assignment is made, to hold up in court in the unfortunate event that the assignee of the assignment contract tries to not pay you.
Also, the determination of how much mark up, or fee, you will charge is usually dependent upon how good the deal is. If your investor is likely to make a lot, then you can go on the higher side as jmcquarrie mentions, however, many of your deals will be where there isn't a huge profit to the assignee and you will need to be more reasonable with your mark up.
Remember one thing: pigs get fat, hogs get slaughtered.
Good luck.
You and/or your real estate agent will have opened escrow once you have a signed contract in hand. You are in control of the escrow, and a party to the transaction, so you will need to to call the escrow officer and explain that you have made the assignment and get a copy of the assignment contract to them. Once they accept the assignment contract, then your assignee will have the rights to the escrow officer as they will be a party to the transaction. You will want to retain a good relationship with the escrow officer so that you can be notified when the transaction closes so you can get your check.
Good luck.
When you qualify your buyers, you will discuss with them their expected profit. Their decision to buy may be based as percentage of the purchase price, or a return on equity, but there are other factors too.
Many will say that they want to buy houses at 65% - 70% of the fair market value of the house after repairs. So, you work back from there. So, you will take the estimated appraised value of the house after repairs based on comparable sales, multiply that by say 70% and that is the maximum amount your buyer will want to have in the house.
From that figure, subtract the cost of the repairs and replacements. That will be the price you will sell the house at to your buyer. You will then subtract the amount of your desired profit. The remainder will be the price you will need to buy it at. You will probably want to ask a little less to leave room for negotiations.
Good luck.
The main thing you need to do is get a signed purchase agreement. It will have a clause giving you time to review and approve the preliminary title. You should also have a contingency for the inspection of the property. If you don't want to pay for either the preliminary title report or for a professional inspector to do the inspection, then hurry up and get the assignment signed. At the point you assign it, your buyer will order both and pay for both. There is a chance that the buyer will want you to produce both before they will agree to the assignment. If this is the case, get them to agree to the assignment if all is well with both the inspection and the preliminary title report before you spend the money on both.
Good luck.
Thanks to all of you who take the time to help us newbies! All of this information is so helpful.
In most states, any contract is assignable unless it specifically states otherwise. If or when you write the contract you add to the buyer’s name “and/or Assigns” and the contract stipulates it is not assignable elsewhere in the contract, you have just created a “contract ambiguity”.
If the contract is challenged in court, often but not always, the judge will side with the seller, so read anything you send to a buyer or seller so you know what you are getting into contractually or it could be a really big surprise later.
Let’s examine the life cycle of a “sample” deal where the seller is a homeowner and he agrees to sell his home to an investor for a specific price, let’s assume $100,000 for this example. Let’s further assume that the contract will also stipulate a closing date of 30 days away from the date of the signing of the contract and the buyer must close with cash and no contingency for funding (financing) the deal.
The investor may have agreed to who pays what closing costs such as title insurance and possibly even all the closing costs to get the deal. Immediately upon the seller signing the contract, the investor uses his or other investors’ buyers’ lists to find an end-buyer for the property at a markup of say $10,000 for a purchase price of $110,000.
The end-buyer “steps into the shoes” of the investor because he has to comply with the terms of the investor’s contract, including the purchase price, closing date, funding, and closing costs that were previously agreed upon. The contract price for the property remains at $100,000 but on the closing statement (HUD-1) there is an entry on the end-buyer’s side that is for $10,000 as an Assignment Fee.
The closing agent is given written instructions prior to the closing and the actual Assignment of Contract so he knows how to make the check out – just as a realtor® would be cut a check for his commission at the closing. However, this profit spread is for the sale of an “equitable interest” in the property and is not a commission.
The end-buyer should have given the investor a deposit for the Assignment of Contract and let’s assume further that it was for $3,000. The HUD-1 Statement would reflect the Assignment Fee of $10,000 and another entry would give the end-buyer a credit on the HUD-1 for the $3,000 deposit.
This amount would have the letters “POC” in the description meaning it was Paid Outside of Closing and to whom – in this case it should have been paid directly to the investor who got the original contract from the seller.
The non-refundable deposit for the Assignment of Contract is very important if the end-buyer doesn’t close because the investor can still make money on the deal. In the above example, if the investor gave the homeowner a $100 deposit and the end-buyer didn’t close the investor would still make $3,000 – $100 = $2,900 on the deal that required no money ($100), no credit and no risk outside of the $100.
If you read most standard real estate purchase and sale contracts, they generally stipulate that the buyer is only liable if he doesn’t close to the extent of his deposit – in this case $100. However, if the seller doesn’t close he can be liable for extended damages under a Breach of Contract lawsuit.
What if the investor can’t find an end-buyer in time and his closing date is fast approaching? If the investor isn’t familiar with how to automatically extend the contract by contractual language he may be at risk of losing his deposit.
One very simple way of getting the date extended is put language in the original contract that allows for an extension in the event of something happening; i.e. buyer’s inability to have his hard money in place timely – denote specifically how much additional time (extension) the seller must allow the buyer.
Randy Bailiff
Dean Graziosi Real Estate Coach
Hello
I have found a really good deal in my area and was wondering if there is any investers in Norman, Ok area. Im not in the success academy ive just been learning from been on here and reading Deans Books.I dont have credit or cash of my own so can some one help me?
Maranda
Maranda
FL is not a Debtor State. Banks may come back to recover any losses from a s/s. So you must be sure to have an attachment to void their potential actions. Not sure if gastophle affidavit will also disallow a 1099..Anyone else know? Semper Fi D-LO
FL is not a Debtor State. Banks can and do come after Homeowners for any shortfall. Not sure if a gastophle affidavit disallows a 1099 being processed. Anyone else know? Will appreciate input. Semper Fi D-LO
To Randy & Brent,
The info you gave here was invaluable to say the least. I'm in NJ and have been building my buyers list which is a constant. I didn't know you could collect half the assignment fee upon assignment and the rest at closing thanks for the info!
Moving forward daily will get you to your goals!
"You become what you study" - RTK Rich Dad Poor Dad
http://bulkassets.com
That is what the double is for right?.. o yea and when you want hide your profit margin
-Chris and Kether Sprague
“I do not think much of a man who is not wiser today than he was yesterday.” -Honest Abe Lincoln
Want off market sellers to call you? I think writing letters to vacant home owners is a great marketing avenue. I have vacant homes in every state! With the owners address! I want to partner with other wholesellers. If you are interested, please PM me! -- This is how I got my first deal, and I will give you leads and help you build your/our team! if you don't have them already.
Anyone From Houston, Tx that can help me out structuring deals? Thanks!
Romans 8:28
Before making an offer, have your agent contact the the listing agent and ask the following:
Are there any inspection reports?
What work has the bank agreed to?
Is there a special "as is" form?
How long does it take the bank to accept an offer?
How does your agent deliver the offer?
Offers are usually FAXED to the bank. The listing agent needs your originals. There is no formal presentation. Keep in mind: nothing happens evenings and weekends (banks are closed)
Since there is no face-to-face presentation to the bank, provide the listing agent with a pre-qualification or Proof of Funds Letter. Make your offer easy to accept. Use as few contingency clauses as possible.
Hopefully these tips will manage your expectations. Remember that REO's sell at pretty close to full market value and are not the deals presented on late night television.
Randy Bailiff
Dean Graziosi Real Estate Investment Coach
I lived in Houston for a couple of years. More specifically I was in Baytown / LaPorte area.
You will find that your area is very similar to most and that most of us on the website can help you.
The question would be what can we do for you. What kind of deal are you trying to structure. If you give us more someone on here or myself can answer these questions for you and give you a direction to go by.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
Hello, DG Folks
I reference to the question concerning the balance difference in a short sale transaction. The comments are all true, as for the bank, in a short sale a expected reduction in price is exceptable within 20-50% range. Because this is and approximate loss the bank will see if they reacquire the property. Which is not something the bank wants to do. I have made and had offers excepted but personally, I always reassigned. If hind sight were 20/20 I would have held. The key to short sale is: having your facts straight as for the valuation of the property, both pros and cons, as well as having your money ready. There are thousands of buyers out there, just don't be greedy in your offers, it won't work out for ya
Thanks Nate
The only thing achieved without effort is: "NOTHING"
HELLO DG FAMILY,
I relationship to the and assign after your name, in addition it is a good idea to write in a inspection clause, about 10 days or so to give yourself time to evaluate the property. Also I have used this opportunity on occasiion to also put in a opt to purchase clause, allowing me the chance to also lock it up for myself. In otherwords I am asking the seller not to sell to anyone else during a agreed upon time frame other than me.
Thanks, Nate
The only thing achieved without effort is: "NOTHING"
The only thing achieved without effort is: "NOTHING"
An assignment of contract is a simple one page contract that assigned all rights to a purchase contract from one person to another, and only needs to be signed by the initial buyer/contractee and end buyer/contractor. The only reason you would have to put "and/or assigns" after your name on the original purchase contract is it is specifically states so in the purchased contract. There are a few states that have "non-assignability clauses" which merely state that in order to assign the contract it must be agree to in writing by the buyer and seller, hence the "and/or assigns.
Obviously this doesn't apply to REO's, Short Sales, Fannie Mae or Freddie Mac properties as they get to see the buyers side of the HUD statement and will not allow it to close with an assignment since they are tasking a loss.
Good Luck,
Dave
__________________
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
first time on this forum so hi to everyone.... this question is killing me so here goes. when doing an assignment,is earnest money involved at all or does it depend on deal? since no one has mentioned this before, im curious.
Hi, everyone how's everybody doing on this lovely day? My name is G.Clermont a.k.a Born Rich. I am desperate my back is against the wall, and I need help from my DG family. I want to do Assignments in my city Hollywood FL, I don't have a R.agent yet. My question is how do I go buy doing it alone, what is the right thing to do? I want to get it going and start making some MONEY NOW. Is there anyboby out their working on or has done assignments deals in Hollywood FL in the past, who can help me get it giong. The information you provide and your step-by-step guideness will help me a instenly. Right now I'm on Craigslist looking for FSBO homes, and may have my eyes on one or two properties in mind. I am trying to get the ball rolling, and I'm counting on my DG family to help me get this done. THANKS A BUNCH TO ALL MY DG FAM. AND I APPRECIATE ALL YOUR HELP. THANKS YOU GUYS GOD BLESS YOU ALL HAVE GODLY DAY...
MOST HIGH GOD LEAD***move all the obsticals out the way..
**NOT MY WILL,BUT YOUR WILL**
Hey Born Rich12,
My first question for you is, Do you have at least 1 of Dean's books? The most recent one is the best to give you an overall guideline.
This will give you some steps to take to cause you to end up around the right people.
Have you checked to see if there are any local REIA's in your area?
Have you located any other investors in your area who could use some free labor in exchange for some valuable conversation and/or guidance?
Just some suggestions,
Stephan Roberts
"In absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia!"
Here is a FREE property analyzer I've found:
https://tvallc.infusionsoft.com/go/RehabLite/sroberts/
It's a great tool to use to help analyze your deals (and did I mention it's FREE)! But, you really should spend the $97 and get the full premium edition! IT'S AWESOME!!
Hi All, I have made an offer $53,000 on a SF home with ARV 140,000. My realtor is duel agent. My offer was accepted by the holding bank. So the problem is the offer I submitted I do not have the cash to close the deal. I have been looking for a buyer desperately. The R.E Agent has sent over the docs to my attorney and I will be meeting with him to look over the bank docs. I guess what I am asking now is WHAT THE HECK DO I DO??? I could not find a buyer, I do not qualify for a loan and I can not find a Partner.
This business is not at all as simple as one would think THOUGH IT IS FUN!
Can someone share their thought as to what to do. Thanks
Hi ANita...I had previously spoken with a FSBO person prior to them obtaining a realtor to his home...It is still on the market but not sold yet..it is owner/vacant...Do you know if it is illegal to send a letter to the owner to say I am still interested in his property once his "contract" with his realtor is expired? Thanks for your help
Can someone tell me where I can find information on building a buyers list. What should I be doing to find these buyers?
Forgive me if you have already tried these things, but I wanted to offer a few suggestions:
1) Contact any "We buy houses" sites online, they can usually give you a reply within a couple of hours. They'll be looking for a discount, but depending on the condition of the home it might work.
2) Have your Agent send you a list of all cash sales that have occurred within a half mile radius of your home over the last 6 months. These are usually other investors, AND they have already purchased in the area of your property so you know they are knowledgeable of the area and are interested in investing in that area (One thing about this method, you may have to find the person by going through their old selling agent. If that's the case, that agent will probably want the selling agent commission for closing on this new property you are selling).
3) If you have been networking with other wholesalers in the area and through your local REIA, then contact every one of them to let them know you have a property for sale (be willing to split your profit with them in some way).
and
4) The obvious method of posting ads on craigslist
Hope some of this helps,
Stephan Roberts
"In absence of clearly defined goals, we become strangely loyal to performing daily acts of trivia!"
Here is a FREE property analyzer I've found:
https://tvallc.infusionsoft.com/go/RehabLite/sroberts/
It's a great tool to use to help analyze your deals (and did I mention it's FREE)! But, you really should spend the $97 and get the full premium edition! IT'S AWESOME!!
Visualize a real estate purchase contract with just a few extra words added to your name as the buyer. This would look something like this: "Buyer: John J. Doe, and/or assigns." That's it. Seems simple, and it is. But, it opens up many opportunities for profits in real estate investing.
The "assigns" would be anyone that you want to pass your purchase rights along to. You have effectively locked up a property with a purchase contract. You can now go ahead and buy it, flip it, rehab and rent it, or any other strategy that's legal. But, you can also pass it along to someone else for profit, never buying it yourself.
The simplest way to profit in this situation is to simply locate one or more buyers in your buyer database, show them the value in the deal, and take a referral or "bird-dog" fee for bringing the deal to them.
You assign your rights to the deal, and they go forward to closing, paying you your fee after or at closing. You profit handsomely, though you only had whatever earnest money deposit to lock up the contract at risk. By knowing who your buyers are likely to be before you contract the property, that risk is very low if the value is there.
Randy Bailiff
Dean Graziosi Real Estate Investment and Life Coach
I live in Alabama and do not know the law about assignments. I work in an office that lists and sells foreclosures, so I assume that this process does not work for REO's, etc,. After reading many of these informative posts, assignng a contract sounds a little risky. On the other hand, I am new to these types of dealings. I need to purchase Dean's book. I have learned much so far in this study.
Linda
Hi every body I am new and i need help if possible which how to locate the buyers through what? I will appreciated.
My name is Ramses and I am very new guy on the block.
There are lots of ways of locating investor buyers, but Dean, his colleagues and others have programs for that...basically databases that are updated regularly.
Rick Allison, Realtor
Amarillo, Texas USA
Find comps, private lenders and cash buyers nationwide: www.TheRealEstate.PRO
Foreclosure and pre-foreclosure search engine: http://tinyurl.com/b6w7h6o
The People Helping People Movement: www.greatEPXsite.NET