OfflineHello DG family! I am new here and this is my first post. I have run into a little problem with my broker. I found a good broker so that I can advertise for buyers who need help getting a loan. I told him about my strategy to assign deals and he said that they will not lend money to my buyers unless there is a contract between the end buyer and the seller. Isn't that what an assignment of contract is? I will get a contract between me and the seller and then rip it up and create a new one for the buyer and seller right? Wont there be a final contract between the end buyer and the seller in this type of deal? If so what is that contract called and what does it consist of.
Thanks so much,
Will Clarke
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The assignment contract is between you and your end buyer. The contract spells out how much money you will be paid from the deal.
It needs to be included with the closing docs on the HUD-1 if they are getting you paid out of the transaction.
Some investors will pay you seperate. If that is the way they do business, then you need to ask for half the assignment fee when they enter into the deal and the remainder at closing time.
If it is a commercial deal, I would accept half my assignment fee when they enter into the deal and take the other half as a part ownership in the deal. This is a great way to increase the money you make on a deal.
Thanks so much for you input! If anyone else out there would like to give me some information as well it would be greatly appreciated. Thanks so much
There are two documents used in an assignment of contract. The first is the purchase/sales agreement between the investor and the seller. There is a separate contract between the investor and the end-buyer. The second contract assigns (or sells) the investor's interest in the purchase/sales agreement to the end-buyer. The original purchase/sales agreement goes through the entire process and the end-buyer has to fulfill all the requirements and terms of that contract. The title company has to have both documents to know how to prepare all the ownership transfer documents.
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