How to Structure Deal with Buyers Getting Mortgage? 2 posts by 2 users

Posted: 07/29/2010 at 05:20PM

Hi,
I have a friend/real estate agent with clients looking for a property in a part of the state that I'm familiar with (and the agent is not).

I'm not sure how to structure the arrangement with the buyers so that I legally get my fee-for-services. I've done contract assignments before, but that was with investors who purchased all-cash/hard money. These new buyers will get a mortgage for the purchases (2 2-family properties and they will live in one unit and rent the other). Likely they need most of their cash funds for the down payment on the loan, so to have them write a check for my $10k fee could be a stretch. I also thought about structuring the purchase offer as a joint purchase and they the buyers buy me out of my interest in the property (but that seems more complicated than it needs to be).

They are pre-approved for up to $250,000 per property. Can I structure the deal this way:
* Property market value: $300k;
* I negotiate and sign contract with seller for $240k;
* I have signed contract with buyer for $250k, with addendum that explains $240k for property and $10k for contract assignment;
* Buyer completes mortgage process using contract with addendum;
* At closing seller gets $240k minus Realtor commissions etc, I get $10k, and buyer gets property.

Would that scenario work?

THANKS!