Exellent Question about contracts..need insight.

Any deal where you are trying to assign a contract to a third party, regardless who the seller is (FSBO, or Bank) you will need to have the "right to assign" in your base contract offer to purchase. Banks generally will not allow you to assign contracts that you have with them. The base contract that you have made your offer with will allow you the right to assign, but when a bank counters you they will include a non-assignability clause in their counter. Signing their counter offer will prohibit you from assigning this deal to a third party. I hope that this information helps!

Good question!

Here is how it is done everyday by the Pros:

1 - Create an INVOICE whereby the Bank must pay you to be released from your
Contract with it.

Basically, it works like this:
A)Create your Contract with the Bank
B)Create your Contract with your Buyer
C)Create a new Contract between the Bank and your Buyer (give to the bank)
* Of course be sure to ADD your ASSIGNMENT FEE to your "Sale Price" to
your Buyer!
D)Create an Invoice to the Bank, paying you to be "released" from your
Contract(!) ( File this Invoice with your Title Company! )
E)ADD a Reference (addendum) to the Invoice to the Contract, to make it a
Legally BINDING element of The Contract!

*** That is how you effectively "assign" REO's.
Your Invoice PROTECTS you by PREVENTING your Buyer from going AROUND you,
cutting you out of your deal - because the Invoice "clouds" the Title. So,
the property cannot be sold unless you are PAID at the closing.

That is how the PROS do it everyday.

2 - Simply ADD your "C" Buyer to your Contract with the Bank.
Then write a Quit-claim deed to remove yourself from the Contract.
Which will effectively "assign" the property to your Buyer!

I am sure that you could Invoice the Bank, as above, to release you from the Contract, instead of doing a Quit-Claim Deed.

DARRYL DEAN
http://Tinyurl.com/YJWQVJA
Email: darryldean / gmail