assigning a deal

I have never assigned a deal, however, to my knowledge, all one must do is ensure the contract has the following clauses:
A transfer clause, so you can legally reassign the deal.
A clause to back out after X without penalty. You basically want to try to lock it up for 30 - 60 days to find a buyer.

After you find a buyer I believe you merely sign a contract with them transferring the purchase rights to them at an agreed price as part of the financing.

I have my first deal with tax sales.The guy wants to sign over his property to me what contract do I use.Or how does he sign over the deed.How exactly!

I have a certain situation, someone I know is not happy where they are living and are selling their property. How do I go about getting them out of that house by assigning the deal to an investor? Where would I go to start initiating this?

3rd party investors want 30% below ARV less repair costs! Which is pretty much impossible!!! Unless I stole a house...lol.

OK, so here is a hypothetical situation. You find a property in preforeclosure and all the owner wants is for you to make the back payments and he will sign the property over to you, which you plan to assign over to another investor. The question is where and/or how is the best ways to look for investors in your area. Internet or local papers? Also are investors usually just individuals who have a lot of experience in real estate?

I am still hoping someone on this board has actually done an assignment!! Please help us. give us DETAIL...step by step.

thanks

It is pretty simple. The key is in the contracts, which can't really be given as a specific item because it varies state to state and only an attorney could likely (maybe even legally) tell you what exactly the contact must say.

But here it is in a nutshell:
1) Find owners who are want out of their house for whatever reason. Negotiate a price with them that makes the house a great deal. Explain to them you are an investor and have resources to get the house sold, or you may buy the house yourself. This will be most effective dealing with people who have no realtor. A realtor will make this harder to do for a few reasons.

2) If have negotiated a price worth attempting to reassign, or may be lucrative to buy yourself if you so choose to do so, then tell them you want to create a contract. The contract is like normal contract when you buy a house, except it has the terms added that you have the right to reassigning (transfer) the buying rights to a third party at any time. Usually you want at least 30 days before contract expires. 60 or more is better, because you don't want someone to wait until the contract is up just to go and get it at your price. You do not want to put up any earnest money down and there should be no penalty for the contract expiring without the property selling.

3) Now you start marketing the house once you have the buyer rights, at the price you are under contract for. Your targets are both investors or general home buyers (but they should be investment minded, maybe even pseudo investors). This is the part, like finding that house, that will be dependent on your efforts. You seek out larger investors (use google) and present your deal. A lot of this can be done by email. You can also post ads on craigslist like you would if it were fsbo, but direct the message to attract an investment audience. The thing is, you want to really focus on people are doing investment though, because they will be looking at hard numbers as opposed to a picky future homeowner. If you don't deal with it as an investment property it can turn into a problem because regular buyers want to view the home, be picky and generally turn it into a hassle like a realtor deals with that probably falls outside the scope of what a reassignment is suppose to be.

4) You will negotiate a price to transfer the home to them. You will sign a contract with the new buyer to transfer the rights of your contract with the seller to them for X price. They pay you, they assume the contract, you walk away.

Use a reasonable attorney familiar with your local laws and procedure to draft the contacts on your first deal to be sure. Once you do just one in your area, you will then know the concrete details of it and have the contracts so you all need to do in the future is switch names and prices and such.

Thanks for taken the time to write your response. I get the whole gist of it.
But...

When I fill out the agreement of sale with the seller, do I add and/or assign to my name in the buyers field? Do I also sign it with and/or assing after my signature? Does this alone give me the right to assign the contract to a 3rd party investor? Or does there need to be an addendum to the contract?

Once I find an investor to assign it to, when we (me and the 3rd party investor) sign the assignment contract, does the orginal seller need to sign it as well?

Once I have assigned it, does the new buyer (the 3rd party investor) now have to comply to the agreement of sale contract that I filled out with the original seller? Or can he make changes to it?

Any investors in DE that have any experience?

thanks,
Darren -DE

Dean....I have read some conflicting information on your site about assigning a deal. Could help me understand please.

I have read (from you) that all that needs to be done to leagally give the right assign a deal is to write and/or assign after your name in the buyer field of the contract, along with signing your signature with and/or assign.

Then I read (from you) that you need a Reassignment Clause the give the right to assign the contract.

So which one is it?

Thanks
D - DE

I am still reading the book and I dug into the info on the website and here it is more clear.

When you make an offer make sure you include the following:

1. Reassignment Clause
2. Cancellation Clause
3. Ability to Acquire Financing
4. Property must past inspection

THEN you call SCROW, and tell them you want to re-assign the purchase agreement to another investor

NOTE: Assuming you opened SCROW.......

I have a possible deal on a foreclosure. I want to assign the deal to an investor. I say possible because I have not yet contacted an attorney to help me with the contract info mentioned above. 1) What is my next step now that I found the foreclosure?

2) What should my finder's fee be?

Thanks

Blanca

I believe this is correct: and/or assigns should do it. One note: If you are looking at foreclosures (ie bank owned, HUD), they arent going to accept this.

Along with what mark said,thats correct,banks do NOT like RE-ASSIGNS they like to know who they are dealing with.so,if your going to ASSIGN make sure your looking @ PRE-FORECLOSURES or FORECLOSURES that haven't happened yet, NOT REO,HUD,VA,PROPERTIES.YOUR HERO,SULLY

If you are working with a realtor please let them know your intentions...your life will be a lot less hectic. I messed this whole process up the first time I tried it and I eventually had to talk everyone into signing a brand new contract...which they all did...man was my attorney mad at me! He yelled at me for 5 minutes basically telling me how stupid I was. I never said I was the smartest guy around...I just don't make the same mistakes twice!

so what happen, so we can learn from the mistake.

thanks,
D - De

I just had a bank accept an offer on a deal today with my name and/or assigns with no problem so I assume it can vary from bank to bank

If you are working with a realtor and you plan on doing an assignment let them know upfront that you want to assign this this property to another buyer for a small profit. The realtor wants to make sure the deal closes so they get paid. I tried keeping it quiet from everyone and then I was running out of time. Two days before closing I found a buyer. That isn't much time to work with and everybody was pretty mad at me. You get to the point of no return. If you get one locked up, you need to find a solid buyer within 2 weeks or less. Ideally, you would have your buyer first. Then this is the most important thing I can tell you---FOLLOW THROUGH! Make sure the deal happens, follow it through to the end. Stay in touch with your buyer every 2 or 3 days, people get cold feet or buyers remorse and you need to be prepared to handle problems when they arise. If you can't find a buyer you need to prepare to close on the property yourself or be willing to walk away and possibly lose your deposit and inspection cost.

What is SCROW?

Shonda

Does anyone have any experience with a lease purchase option? Can you give me specifics on your experience?

as the buyer or th seller?

Each bank work independent of each other. Some may assept an assignment as others may not. More and more banks are likely to accept assignments with the credit crunch.

Shonda,
I believe scrow is escrow you get through a title agency. Hope that helped.
Kristy

If a property owner of a pre-foreclosure home allows you to lock in at the price that both of you agreed upon what happens to the difference? Let's say for instance the loan amt on the property is 400,000 and the owner agreed to sell it to you for 350,000 what happens to the 50,000?

I may sound stupid but I want to know, who becomes responsible for the difference since the total amt owed to the bank was 400,000? or may be I don't understand the technicality involved. please help me understand.

Thanks so much

ruby21pv

Someone please correct me if I'm wrong, but I think that you would want to talk to the bank about doing a "short sale". My understanding is that this is when the bank agrees to reduce the amount due on the mortgage, and will write off, or absorb, the rest. The homeowner, or the two of you together, would need to get the bank to agree to this before they "sell" you the house for $350,000, or it seems that either the seller, or you, would still owe the extra $50K. Does that make sense? (If I'm wrong about this, anyone, please correct me right away. I don't want to confuse anyone.)

learning myself,
Rina

Rina is correct... THe bank "eats' the difference ie they did nto get paid back all what they were owed.

As an aside... in the past this debt forgiveness (50K in this example) would be considered income to the seller (which he would owe tax on). Pres. Bush was working on legislation to eliminate this income/tax. I never heard what became of that legislation. Maybe someone else can update.

Hi everyone,

I need some help i have a seller and i found a buyer. I am going to be speaking with the buyer today. What form do i use to make sure i get my finders fee. Is there any calculation i have to do? I am very nervous. The property is $124,900 compeletly remodeled, appraised at $140,000 4 weeks ago. How would i make this transaction? Pleas help before i speak to this buyer. This will be my first deal (if there is one).

During a short sale the bank does not have to eat the difference. The bank still has the right to go after the homeowner that was losing their home. The bank has the right to all that was written off. The bank usually does this through law suit or with a 1099. A 1099 is a document stating that income was made. This 1099 has to be included during taxes. If the homeowner has assets higher than their liabilities that homeowner has to account for the 1099 as income and thus be taxed for more income - ouch.

You may not see banks chase the lawsuit or 1099 but they can.

The sure way to make sure a bank does not give suite or 1099 is to add to the contract that the contract is contingent up on the 3rd party bank acceptance with attachment of a gastople affidavit. The gastople is a contract that the bank would sign to halt all recourse against the homeowner.

This is a matter of state law. In Arizona, this is NOT true. AZ is a non-recourse state. The bank gets the house and nothing more.

And practically, this doesn't happen anyway (except possibly in matters whre fraud is suspected). Again, the bank gets the house. The homeowner may or may not get a 1099. But they aren't sued.