OfflineIf I have locked in a deal with a seller, and I've signed a contract with all of the right clauses, what should I tell buyers when I explain the deal to them? Do I explain the whole situation to them or should I be vague in order not to raise flags... another words, if I tell them that I've secured a house for $180k but I'm willing to assign it to them for $200k will that not come across as "fishy"? If I don't explain the whole situation to them though they'll probably want to know if I'm licensed or if I'm a realtor?
Also, if we come to an agreement, do they literally transfer $200k to me, then I pay the seller $180k, and then the title company transfers the deed? Will a buyer really be willing to do that? Won't they be nervous that they will transfer the $ to me and then for some reason the seller does not go through with it, or I will run off with their $, etc, etc?
Does anyone have any tips to avoid these possibilities?
Thank You!
What do you tell the "Buyers"?
Posted on: Thu, 04/10/2008 - 15:52
What do you tell the "Buyers"?
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- by benbeka
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I just signed up for the school and cant wait to know the answer to such a seemingly important question. looks like your a rookie as well, good luck to you. Hope we can all figure out how to make the system work. I believe!
Russell
Once you assign the contract to the new buyer they show up at closing and take your place as the buyer. The HUD statement lists you as a line item to receive $20k and you are cut a check. Everyone knows how much you made on the deal. In fact in the example you give you would be making more than both of the agents involved! That may upset them. To make the whole thing go smoothly make sure you follow the sale all the way through. Things happen in real estate sometimes and you have to be on top of it when it does. Most real estate agents and title companies have never been involved with an assignment of contract so be prepared to explain all of the details. The first time I tried to do it my agent told me it was illegal! I had to walk her through the whole process on how it works-then she wanted to do one for herself! I feel if you are going to assign a contract it is best to be upfront and let your agent know ahead of time what you are doing. It will cause them more work. Good luck.
You've got to find your obstacles and call them out! Unsheath the sword, and do battle with whatever it is that holds you back!
Good points! I will definately keep those in mind.
Thanks!
The key to doing the assignments and including the information on the HUD document is disclosure. You should have disclosures to the Seller, Realtor, Buyer and even the bank.
Most banks do not like an assignment at all. The reason is often that there are not enough disclosures. Banks look at deals with assignments as possible inflating of the price and obviously do not want to be involved in something that can look fraudulent. Disclosing everything helps eliminate this.
Another way assignments are paid is when you sign the assignment to the new buyer to give them the right to purchase using your contract you can have the buyer pay you then before closing. Doing an assignment this way eliminates the HUD disclosure so the lenders will not have as many problems closing the loans. I say not as many because I don't know a lender that doesn't have problems closing even perfect loans.
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Thanks cbrpower. I love your point of view. Very motivational!