OfflineHi everybody, I was doing a lease option for someone and when I showed the house today I was offered cash. This is not a fixer upper, just a nice 3/2 brick ranch. We originally had the purchase price at $91,500 for the LO. The offer was $85k cash with quick close. The seller agreed and since my option fee for the L/O was $5k, he said he wanted me to still get $5k and he would take $80k and call it a day, but he wants me to get the $5k at closing. How do i make this happen? Do I have any choice other than assigning the contract to the buyer? And do we need an attorney with a cash closing or just a title company? I need to know something as soon as possible because buyer wants to get the ball rolling Monday morning. I still have to do a purchase agreement with the owner either way since we don't have that type of contract. I suggested that he could deal directly with the buyer and then just pay me ( yes I trust him that much!), but he said he wanted me to get paid at closing. What to do, what to do!!! Help please. I never anticipated this happening!
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
There is no form of written agreement at this point. Should I ask for POF first?
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Get the property under contract and assign it to your buyer with a assignment contract. And the seller doesn't have a say when you get your assignment fee ($5K) the buyer pays it to you whenever the two of you agree. I would ask for the fee upfront from your buyer, if your buyer doesn't want to give you the full amount until he closes, tell your buyer to give you half now non refundable and the other half at closing. Always make sure your buyer haves some skin in the game so they wont back out.
Reynold Orozco
you can get paid at closing; you need to write up an assignment contract between you and the buyer (where you assign your interest in the property to buyer; make sure you don't say it's a 'finders' fee) and that document will go to escrow together with all other contracts to give instructions to title company how the funds are to be disbursed.
Make sure on the Purchase Agreement you have "and/or Assigns" after your name as buyer. You can also have a clause that says "This contract shall be assignable" in the special provisions.
Have an Assignment form (contract) stating that you're selling your interest in the contract to ...
Congrats on your deal!
Val
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
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Thank you. That helps a lot. Is there anything I should omit or cross out on the contract? It is being sold as is.
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Does the buyer or seller take it to the title company? The obvious answer is the buyer but since it is a cash sale I was wondering if both the buyer and seller would need to go.
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
@@
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
It's been over a year since I've done a deal. I just recently quit keeping my 2 youngest grandchildren, ages 3 and 5, after my daughter quit her job and decided to be a full time mom.. Soooo... Now I have time to continue being a REI!!! With that said, either I'm getting Alzheimer's or its just been too long but here's my question as silly as it sounds. If the purchase price is $85k and I assign it for $5k, is the purchase agreement between me and the seller $80k or $85k?
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
I would find the title company so that you can talk to the escrow agent who will be closing your transaction, and make sure she is on the same page that you are, and has closed transactions with assignment contracts.
Closing agent will schedule everyone (at different times) to come in to sign docs in her presence, collect the funds, and disburse them.
Don't forget about closing costs, so it's not going to be just $85K; it's usually split between buyer and seller, so make sure they are aware of that...
Your purchase agreement with seller will be for 80K; your assignment contract between you and your buyer will be 5K. Your buyer is paying $80K for property plus $5K for the assignment (and closing costs); seller will get slightly less than 80K depending on his share of closing costs...
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
That makes sense. In SC we have to use attorneys, so wouldn't they use their own title company or even if the buyer can choose a title company, wouldn't the attorney handle all the signings and disbursements at his office?
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
I also bought in SC at one time and if I remember right you only have to go to the attorney, they will charge you to do the paperwork and they do the deed filing and such. They also do the disbursements at that time. Just ask them ahead of time but I think it will still work that way.
After you sign the contract with the seller for the $80k, you have the end buyer sign the assignment contract and give him a copy of the original contract and the assignment contract. I usually require that the buyer give me the non-refundable Assignment fee when he signs the assignment. That way he has enough skin in the game that it will keep him from backing out of the deal. I actually had someone tell me they had changed their mind on buying and when I told them (again) the fee was non refundable, they went thru w it--so it CAN make or break a deal.
After assignment is signed, YOU take the original contract and the assignment contract to your atty and he/she will take care of everything. At that point, you are finished. Even so, I usually keep in touch w my atty until everything is complete, just so that I have happy and hopefully repeat customers.
Karen
"You're never too old to be what you were meant to be!"
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This is correct except that when assigning a deal, YOU will not be charged anything. All charges will be with buyer/seller.
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
I got the purchase contract executed today and tomorrow the end buyer will meet with me so I can assign it. I guess I will have to find out ahead of time if the attorney is familiar with assignment contracts. I'm glad you told me this because I was going to give the buyer the contracts.... But I was not feeling comfortable about it. He will not expect to go with me I hope!
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Karen,
Honestly,
You don't even need to bother with the title company at all. You and the end buyer can sign the assignment contract prior to the closing and collect your cashier's check from the buyer.
Lenee
www.allstarhouses.com
~Act successful! And you'll draw it to you.~
~Every achievement, big or small, begins in your mind. It starts as a thought.~
yes, the attorney (who I suggest you choose, if you don't already have one) will take care of the closing... in Cali and OH it's done with title companies, so that's how I usually do my closings
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Thanks for the help everybody, but this deal might not work out after all. The end buyer was supposed to call me today. I've called him 3 times but his voice mail has not been set up so I couldn't leave a message. I hope it's just that he is not available and its not his ignoring me. He was all excited about doing something today to get it started. I got a new purchase contract signed with the seller yesterday and he is expecting a call from me to confirm the sale but u have nothing to tell him. This is a bummer. Karen, I may have screwed this one up by not getting the assignment signed on the spot. But I didn't know it was going to be a cash sale nor did I know if the seller would accept the offer. I'm giving the guy the benefit of the doubt and hope that he calls me back either way. Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
Shirley,
Way to go! Thanks for the inspiration.
Jim
With your success in mind,
Jim McKinney
"With integrity, nothing else matters.
Without integrity, nothing else matters!"
Shirley,
you did not screw it up... you have a purchase agreement, so the seller can't sell it to anyone else; what you need is to have a buyers list, so that you can offer it to all your buyers, and the first one to put up the cash is the one who gets it... you never want to rely on just one buyer
right now you should be advertising your deal on CL to get some more buyers, or attend a rei club and offer it there, or put up bandit signs offering property...
Valerie
“And will you succeed? Yes indeed, yes indeed! Ninety-eight and three-quarters percent guaranteed!” ― Dr. Seuss
"I believe in angels, the kind that heaven sends; I am surrounded by angels, but I call them friends" - Unknown
My journal: http://www.deangraziosi.com/real-estate-forums/investing-journals/59110/...
Just keep thinking positively! (With your fingers crossed!)
Karen
"You're never too old to be what you were meant to be!"
www.deangraziosi.com/real-estate-forums/investing-journals/59128/day-for...
"Shining Like a Star & Dancing on Sunshine"
"Shoot for the moon! Even if you fall short, you'll still land among the stars!"
This is a great time to get your buyers list longer,you have a property under contract that you can market in so many ways.CL is a good one sense you dont have to run ghost ads,put it out there and they will come..Next one will be easier with more buyers on hand.
ps. dont forget to get all info from callers.
Doing good..
Aaron-n-suzy
Literally! The guy never called back. And it was still on Craigslist. So I got a call this morning and showed it again today as a lease option, the original plan. They want the house and they have the option fee. So all I have to do now is have the seller tear up the purchase contract and rewrite a least option. He's been great during all this and is willing to do whatever it takes. The end buyer will contact the mortgage broker tomorrow so we can get a number of months for the lease. And hopefully by tomorrow evening we'll get everything signed and ill walk away with $3500 in my pocket. I lowered it from $5000 to make it more attractive. The seller said since I did that that he would pay me the other $1500 when it is sold!! Karen, I'm definitely keeping my fingers crossed this time. If anyone has a good rental agreement, I would really appreciate a link so I can print it off. I want one that has some good stipulations to protect the seller. I am using the lease option agreement that's on this website. If you have a better one, I'd also like a link to that as well.
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.
I put this house under contract a couple weeks ago. It's fair market value is over $83000 and I could only get them down to a cash price of $55000. It was rented until May and the tenant died so now they want to sell. It only needs painting inside and new carpet and tile to make it more rentable. It is a shingled 2/1 that was painted recently and had a new roof 2 years ago. It is in a highly desirable area in Anderson, SC. It's not exactly a great deal for an investor to flip but could be rented out for $600 with very little work. Any suggestions?
Shirley
Everything works out in the end. If it hasn't worked out, it's not the end.
You have not lived a perfect day, unless you have done something for someone who will never be able to repay you. Ruth Smeltzer
It is what it is 'til you change it.