Commissions in an assignment deal

No, the agents do not have to work together except to split the commission. The listing agent and the buyers agent always split the commissions.

The attorney fee is part of closing costs but the fee you will be paid for assigning the deal is not part of that. The end buyer pays you the assignment fee either at closing or before.

shirley

I understand the agents don't have to work together. I could have phrased my question better. Let me try again: if I find a deal through MY agent, he/she is going to be the one to complete the sale with my assignee as the buyer's agent, right? Meaning my assignee cannot bring their own agent in on the deal?

So you are saying that the attorney fee is paid as part of the closing costs by my assignee, correct? So if I assign a contract for $5,000 then I will get every penny of that $5k?

Will work with your agent at closing.

Yes you will get the full $5k

Thank you! I am so close to putting together my first deal and I appreciate all the help I am getting, even if the questions are simple.

Hi guys,

These posts are really helpful. I too am getting cloer to my first deal. I am needing a contract to use for assign. i looked at the one on this site but it looks really simple. i keep hearing about escape clauses, etc...to protect myself. i do have a title company ready to workt with me, but not yet have spoken or found and attourney. am i still pretty close or am i far off? I have bought my bandit signs, have a pre-recorded message phone # , just recieved a list of a ton of properties i need to work the numbers on. i can feel it coming, but need those KEY components for when the time comes I can be prepared. Thanks

M5Mason, whoever brought the deal to you, whether it was a bird dog or a Realtor, they MUST get paid something whether that is a "marketing fee" to the bird dog or the commission to the Realtor. You always want to take care of the people who bring your deals to the table so in the future, they will want to continue working with you.

If there are 2 REAs involved, they will split the commission. That would be your REA (who brought the deal to you) and the sellers REA. The investor you are assigning the contract to usually would not have an REA because YOU would have been the person contacting them from your buyer's list to assign the deal to. However, if you are new and yet another REA found you an investor to assign your deal to, you would have to throw them a bone and give them something (that would not be a commission but some type of "marketing fee"---you don't want to call it a "finder's fee" due to legal/tax implications).

As long as you are not actually closing on the property, your attorney (or whatever attorney is doing the closing) should issue you a check for your full assignment fee. It is always best if you can convince the buyer to use your attorney (as long as you have had good experience with an investor-friendly attorney)to keep things going smoothly. Often, people that are newer investors use attorneys that aren't proficient in these assignment dealings and can either delay or screw up the process.

Our most recent experience with an experienced investor (someone from a cable TV RE show if you can believe that!) used an attorney that sent the seller's attorney a copy of our assignment sheet (that is NEVER supposed to happen) showing that we are making a $15k assignment fee! What a freakin' dummy! We have never had this happen and it may have killed the deal--we will find out this week. So, stay on top of your attorney to make sure the deals get done properly.

The assignment fee NEVER gets written in the contract. You have a separate sheet specifically for your assignment and you submit that only to YOUR attorney and you give it to the BUYER and the BUYER's ATTORNEY. The seller should have NO knowledge about this.

Lastly, never put a property under contract unless you have your buyers lined up. The last thing you want is to be stuck having to purchase a property that you can't close on. We never use "weasle" clauses because they send up red flags to the seller's attorneys. As long as you KNOW you are getting a good deal and that there is a large enough spread in the deal for everyone to make money, you shouldn't have to worry that no one will buy it. Only if there is not enough spread in the deal will you have to worry that you won't find a buyer.

Hope this helps.
Pam & Joe

Rolo,

Speak to your local REA to get a copy of your state's standard Real Estate Purchase Offer and that is what you should use. Most attorneys don't like using those "one size fits all" type of contracts that new investors get from seminars and websites (no offense to Dean if he has one on this site)

It gives you credibility as an investor to use the standardized form. If you don't understand it, bring the subject up at your local REIA group and someone will help you with it; either another member or one of the local Realtors.

Be careful with the "weasel clauses". Most seller's attorneys don't like those and it sends up red flags. The most legitimate one to use would be "contingent on my attorney's approval of this contract" because that IS legitimate and it doesn't make you look like an a-hole. As long as you have good rapport with your attorney and he/she understands what you are doing, their "approval" can take 24 hours or it can take 3 weeks...understand?

Good luck working the numbers! Go get some cash flow!

Pam & Joe