Is contract assigning is legal in my state?

Is contract assigning is legal in my state?

I have read a lot in here about wholesaling and will probably get started unless I find out its illegal to assign contracts in my state. How do I find this out? Any suggestions?

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how to answer questions

The truth will set you free! And you can feel gr8 about who you are and what you do in your community.

Isn't it the truth that you a wholesaler who works for investors. Thus, your contingency will state that you are buying a property contingent upon inspection, due diligence, and the approval of your business associate or partner if you have one.

That last caveat got me out of a deal last month wherein I had tied up the property for just too much $.


Atlanta Area Investors

Can an Investor that generally works in the Atlanta area show me what kind of Assignment Contract they use, and Purchase and Sale Agreement. I would love to partner with a seasoned real estate investor to do deals in the Atlanta and Metro Atlanta area. I do have a Realestate license, and I am eager to learn the Wholesaling business.


Acting as an Agent

I just contacted a real estate attorney in my town about a hypothetical situation and tried to explain what I wanted to do as far as assigning a contract. That is the first thing he said is that I would be acting as an agent so I couldn't do that. I said I will be working with an agent to put in the offers and things but I had information that with the final assignment paperwork it is easier not to work with a title company but to take the documents to an attorney and they knew what to do with it. He wasn't pleased and said that if I was working with an agent then they would be able to handle all the paper work and just have the new buyer pay me to assign the contract before it is assigned and not worry about additional paper work. This was really not helpful and I probably won't be working with him, but he did say it was hard to give any answers on a hypothetical and I didn't sound like I knew what I wanted to have done, so when I have an actual deal in hand to bring it in and he would take a look at it. So I am kind of at a loss here on exactly what I do once I find a buyer for my property that I have locked up with "or assignee" in the offer. I have the assignment contract that I then have the buyer sign but now what do I do with it?


Assignments

Hi. I recently went to a semiar in massachusetts and over heard that it's illegal in Massachusetts. Any info would be helpful. I suppose I couold talk to a lawyer.

Sincerly: franco02130 "Fortune Favors The Bold"

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Lots of Great Info

Thanks to all the DG family who give input on this site with their experiences and knowledge it really helps to clarify and understand the different strategies of REI. It is also cool to see that these threads are years old and continue to run and get updated by everyone.


Assignments!!

Has anyone else having problems or being questioned about if you are planning on assigning contracts by real estate agents? Yesterday, I called an agent that works for Keller Williams and let me say this agent was having a bad day or something crawled up his butt!! Once i told him that i was a real estate investor he immediately asked me if i was involved in the graziosi scheme! I told him that I didn't know what he was talking about. He explained to me that their are a bunch of real estate investors that are doing illegal real estate contracts. I was shocked and to be honest in the past two weeks two agents from Keller Williams were not very happy or didn't want to work with me or real estate investors. I am leaving a lot of information out because I don't want to write a book here regarding the two conversations. I think I am going to write a book about all this!! My question, Is anyone else having problems or difficult working with Keller Williams real estate agents or any other real estate agents?
Thanks in advance
Raymond


To David of Alpine Investments

Thanks for the great information in a easy to understand format. The only part that scares me about your explanation is that if when I get the signed PA to the attorney's office and the buyer doesn't show or falls out of the deal, then I'm stuck with the house if I can't find another buyer.


FIRST DEAL NEED HELP!

Hello Everyone Smiling

I have my first deals in the making,, I have a buyer that has two houses that she is trying to sell I have negotiated the prices for both homes with her I have control of both properties, Wan the numbers etc...

I Think I'm getting a little confused with the technique, am I to sell the property for the asking price plus my assignment fee ( asking 125.000)?

or

Do I run the numbers deduct rehabber's profit, repairs, closing cost, holding cost and purchase price..

Please help!!

P.S.

I also just called a buyer that is looking for a 2 bedroom 1 bath starter home and needs it right away

Please help this Newbie!


I'm a little confused too, but I'll try

to help!

So you have a SELLER (who happens to be on your buyer's list and happens to have 2 properties for sale).

You have already negotiated and "locked-up" (have under contract) the 2 props. (Let's assume that means you compared similar nearby houses (ran quality comps) and calculated estimated repairs, "standard misc." costs at 15% and a profit (Comp X 85%-repairs-profit) to arrive at an offer that was accepted.)

Now, you'd like to know what price to sell it at. The short answer is: Whatever someone will buy it for that is more than you locked it up for, plus closing costs.

The calculation is YOUR PURCHASE PRICE + YOUR PROFIT = SALE PRICE TO YOUR BUYER (plus they pay closing costs).

To arrive at that figure you must think of what "they" (your buyers) are willing to pay. Typically this is part of their criteria (along with location and type).

I hope this helps.

-Tina

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Never, Never, Never Quit, N3Q
"Nothing happens until you place an offer."
"Skip Deal #1, go straight to Deal #2; it's so much easier."

"There is nothing so useless as doing efficiently that which should not be done at all." — Peter F. Drucker... so, "Don't sweat the small stuff." -R.Carlson. "The greatest mistake you can make in life is to be continually fearing you will make one."~E.Hubbard, The Note Book, 1927...so, Do it for the right reason and "Do it with a headache!" - Dean Graziosi, Weekly Wisdom #176


I think it was Nate Street who posted a

list of the states and the applicable general yay or nay on AofC's. I think it was on the RRBP thread, but I can't find it....

Does anyone recall where that is?
DGadmin?
MarkK?
Mike?

Thanks,

-Tina

PS If you have a better targeted search method oon this site, please share. I tried:
states illegal assign assignments and natestreet, plus the TOC on RBBP 30 day thread

__________________

Never, Never, Never Quit, N3Q
"Nothing happens until you place an offer."
"Skip Deal #1, go straight to Deal #2; it's so much easier."

"There is nothing so useless as doing efficiently that which should not be done at all." — Peter F. Drucker... so, "Don't sweat the small stuff." -R.Carlson. "The greatest mistake you can make in life is to be continually fearing you will make one."~E.Hubbard, The Note Book, 1927...so, Do it for the right reason and "Do it with a headache!" - Dean Graziosi, Weekly Wisdom #176


Be careful to who you listen to.

It is legal in every state to sell ownership to a legal agreement. You are not selling real estate you are selling your ownership of a agreement and it just so happens to be in the real estate field. Do not get it mixed up because you will here all kids of crazy replies. Have a great day.

Looking to sell a property Get A Offer on your deals within 24 hours any state.

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Multi-listings in Oklahoma

I hope someone can clarify this for me: I have a great real estate agent that I just hooked up with. I've gotten some great listings but it's my understanding that several agents and brokers all have access to the same listings, so if I decide to make an offer, I have to go through the "listing agent" who is different from the one I work with. Any suggestions on the best way to handle this? I'm thinking it would be best to focus on homes where she's the listing agent; any suggestions?

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Let's Ask State of Texas Attorneys

I'm posing the question of whether assigning is legal or not (in the following letter) to attorneys at the Texas Real Estate Commission (TREC) and perhaps the University of Texas at Austin. I want to know what TREC and case law have to say about assignments.

Keep in mind when reading the following that it is against TREC rules for licensed real estate agents to represent both a seller and a buyer in the same transaction. Often times, brokers won't even allow two of their agents in the same office to represent both the seller and the buyer. In other words, one Remax agent in the office represent the seller of the property and another in the same office represent the buyer of the same property.

The following question leads to another question, though, and that is, "what authority does TREC (or a similar agency) have over someone who is not a licensee?"

========================================================================

Anyway, back to the assigning contract question:

Many real estate gurus teach a technique called, “Assigning a contract,” in which a so-called investor factually flip contracts rather than flipping houses in an investment process. They put a house under contract, usually with a distressed seller, and the contract has assignment clause built in to it. Then they assign (their interest in the) contract to an investor client. The process is typically called wholesaling or assigning.

Is a person doing such a thing practicing real estate without a license? The argument is that they are not, because they are representing themselves in the contract and the second investor/buyer (that the contract is flipped/assigned to) represents themselves. The wholesaler acts as a middleman as does a wholesaler in any industry.

Also, if a TREC licensee were to do such a thing, would TREC or case law consider them to be representing both the buyer and the seller?

Sample contracts or the assignment clauses therein can be provided for your consideration, and they are readily available online.

Thank you,

Rick Allison, Realtor

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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


Why?

I know assigning is just one technique, but I don't see much reason for it, sometimes. I know private money lenders want the house to be under contract, and I/you need to be in control, but in my case I would just do a regular contract on a house. Then, I would present the house to other investors. If they wanted it from me, I would void the first contract, and write another on behalf of the investor. Instead of charging him a percentage commission, I would charge him a flat commission, like $10,000, or I would just charge a higher percentage. In other words, I would charge him 10% rather than 3-6% (in other words: $100,000 house X .10 - $10,000).

The problem is with that idea is that I loose some money. If I get a house for $20,000-25,000 below FMV, for instance, I want to resell it and pocket the entire 20-25 not $10,000 when possible. Of course, every dollar counts. As a realtor, I come across deals that I can only make a 3-6% commission on, but I'd rather have 20-25% profit; that's what I'm saying, and also...why assign? Just put the house under contract subject to financing (do not execute), let other investors know about it, and then when the other investor is found tear that up and write a new contract for them as the sole buyer. See, I can practice real estate as a licensed professional; I don't have to have "assign." I can just practice real estate.

We'll see how it works out with this deal I have going on right now.

__________________

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


IMU: Unconventional/Untraditional House Buying circa 2012

Bird dogs, house hunters, property scouts, etc. >>> find off-market houses, take photos, give property leads (or referrals) to investors, etc. They are compensated on a 'per lead' basis or some form of commission basis from the investor as a 'consultant.' This is not an hourly position! They are not employees and sh/be 1099ed over $600.

Wholesaling REIs >>> market, locate, negotiate, contract each discounted/distressed house from a Seller (Individual or Institutional), then re-market to interested buyers and "flip" their contract (assign the contract) to an Investor Buyer (end buyer) for a 5-10% profit of the ARV. They create the profit spread in the negotiations and acquisition of a property at a big discount (below retail) and get the deal under contract. They are the "middleman."
The matchmaker-go-between a seller and an end buyer. (A-B-C)-->Seller-Wholesaler-Buyer
They ASSIGN their Contract RIGHT (paper) to an end buyer (3rd party). They are unlicensed; self-employed.

Albeit, there are 2 kinds of Investor End Buyers.
1.The Rehab Investor buys/fixes/flips [the house] for a larger profit (equity capture). This is typically done within a 3 month period or less. They 'flip' the house to resell at FMV Retail to owner occupants (retail buyers).
2. The Investor Landlord buys/fixes/holds properties as Rental Properties. The monthly rent provides either mortgage payments & operating costs, cash flow + long term equity capture.

Typically, investors buy with CA$H, some use Hard Money or Rehab loans, some use Private Money or funding.
Of course, there are other 'creative financing' methods used as well.
(Self-Directed IRAs, LLCs, Trusts, Subject-2s, Lease-Options, Wraps, Inheritance $$$, etcetera, etcetera).

Any profits (%s) made during this process are commensurate to the level of the RISK involved at each tier within the deal. Ideally, a win-win-win-win situation is created for all parties involved.
Everybody gets their fair share of the pie. Houses get sold, housing improves, houses get bought.
Jobs are created. Money circulates. Happy Americans.

(Note: As a "B" Plan the Wholesaler can, in turn, become either the Rehab Investor or the Landlord themselves provided it is done within their contracted option period, or the contract can be re-negotiated with the original Seller).

PS. Anyone think the retailer of those $500 designer shoes at the mall paid full price?
I'm thinking there was a wholesaler somewhere in the process...How about the car I drive? Yep. There, too. Laughing out loud

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• "To every thing there is a season, & a time to every purpose..." ~Ecclesiastes 3:1-8
• "Inaction breeds doubt and fear. Action breeds confidence and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy!" ~Dale Carnegie
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Unnecessary confusion

It seems many are missing the key to this, so once again as it has been taught over and over, and maybe this helps:

When you have a contract in place- signed accepted, etc. , technically YOU are the owner of it.
No one can buy the property unless YOU release your interest in the property by releasing the contract. Heck, you may have even paid earnest money on it. This secures your intention to buy if you want or not, all according to the terms of the contract, and presuming the seller won't be backing out. The seller will have agreed or has knowledge of your intention to assign it.

When an assignment is involved, since the only thing you are the owner of and in control of, is the contract (not the property quite yet) with which you can back out of OR continue forward with the purchase, OR pass it on to someone else.

When you pass it on to someone else, YOU smartly SELL it. You are merely selling the paper (not the property) and thereby relinquishing your interest in the property. That is the assignment.

Paper investments are bought and sold all the time.

__________________

Best Regards,
Anita
(Licensed Realtor-Military Vet-9/11Vet)
****
A self-directed realization for 2014 is to:
Live life as if always on vacation and have all the good health, time, & wealth to enjoy it.
Work, only when and IF desired. Helping others do the same. It Pay$ To Connect!
Always In Gratitude.....


Unnecessary confusion-2

By contrast, if you put a buyer and seller together but presented the contract for each to sign and then collected a fee, all without having a contractual interest in the property, look out.

In other words, you would be DOING the transaction FOR them but not owning any part of it.
Now THAT would be acting like an agent.

If you own it though, you can sell it.

__________________

Best Regards,
Anita
(Licensed Realtor-Military Vet-9/11Vet)
****
A self-directed realization for 2014 is to:
Live life as if always on vacation and have all the good health, time, & wealth to enjoy it.
Work, only when and IF desired. Helping others do the same. It Pay$ To Connect!
Always In Gratitude.....


Well said, because that can

Well said, because that can be a little intimidating to somebody at first....that helps me...a lot...!

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Roxann


Assigments

Folks the best way to find if your state has issues or not is to Join the REI club in your state and talk to the other investors in your state who are closing deals and find out who they use to close the deals which attorneys title companys etc, you will find that not all attorneys know whats up and the same holds ture for title companies some will some wont,just ask around, and you should be an active member of your REI Club. Networking this is a people business..take action..get results...John

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wholesaling

You can assign and property on the mls listings but, you can not assign an REO bank owned property on a Reo you have to double close.


real estate agent and wholesaler

as we know real estate agents has to disclose there license status on the contracts, my question is since wholesaling doesn't have ownership of the property but can real estate agent still has to disclose that she is an agent?


Always!

doerbydean wrote:
as we know real estate agents has to disclose there license status on the contracts, my question is since wholesaling doesn't have ownership of the property but can real estate agent still has to disclose that she is an agent?

ALWAYS must disclose in ANY type of RE dealings!

Karen

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well said

The last several posts on here say it well.
And this is what happened to me.
I put in an offer through REMAX, and when I said I wanted the assignment clause, he never heard of it. BUT we were sitting in his office and another agent came over and said she is right, and showed him how to write it up.

Plus I called a RE ATTY office and one atty laughed at me, and told me to go back to whoever trained me as an investor. WELL, a month later I called in to a radio station who has an RE atty on once a month. He assured me that you can do it in Wis, just not with an REO, must do a double close on those.
I didn't tell him on air, that it was his office that told me you couldn't.
IF anyone tells you no then ask again, REI clubs know all that too and are an excellent source of legal questions and good way to find partners to work with.


Assignment Legalities

Hi,folks.I know it's been talked about before,but are assignments illegal?Here in Illinois I can't even get attorneys to agree if they are.With no cash and no credit assigning is where I need to start.Anybody run into legal issues over this?And if I do a double-close and the buyer defaults won't I be stuck with the property?Thanks everyone for this wonderful site!


Is Assignment Of Contracts Legal in my State

Hey DG family I live in California and it's not illegal to assign a contract for fees so if anybody in the family has any doubts about this in CA we are all system go it's time for us to get a move on all of us who has not made out first deal America is for sale it's the changing of wealth don't miss out man or woman up and let's get this done opportunity is never lost it's simply taken by someone else.


Assignment are they legal in your state?

Hey DG family I live in California and it's not illegal to assign a contract for fees so if anybody in the family has any doubts about this in CA we are all system go it's time for us to get a move on all of us who has not made out first deal America is for sale it's the changing of wealth don't miss out man or woman up and let's get this done opportunity is never lost it's simply taken by someone else.


assignment

Clear explanation from Sistreat and others.I am just starting on this but I firmly believe that if too many members from the DG family have done this with no problem, no matter the cons and continue harassment from realtors this won"t be a real issue for me, I"ll just do it.
Best regards to everyone and keep going.


Woo Hoo my first deal

Woo Hoo my first deal assigning a deal hopfully on Monday or Tuesday


Hard Money and Assignments

I learned that if you use hard money and then assign the contract you do not have to pay hard money fees because you never closed on the property...you assigned it. This is tremendous news!

Also I have used assignments in multiple states. Banks don't like you to use them and I have never had an offer even accepted on a Short Sale or REO with the and/or assigned on the contract. Individual sellers usually don't care. They just want the deal to go through.

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Wholesale Assignments In Louisiana?

I'm a newbee in NORTHWEST LOUISIANA. I'm in a location that is just a short drive into the Texas and Arkansas markets as well. Is there anyone working in these areas? If so, I'm open to networking. Any replies are GREATLY appreciated in advance. As I mentioned, I'm new so the DO'S & DONT'S in this area are straight ahead and I'm ready for both.

J.B.

Favorite Quote, Reality: What happens when you pay attention!

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