Knowing When And What Contract To Use

5 Replies

I have a few contracts but I'm not exactly sure when and which one should be used?

@David Battle  It completely depends on the type of transaction you're trying to secure. 

You've asked an extremely open ended question with little to no context.  Can you give us a rundown of the contracts you have &/or the strategies you are hoping to employ?

@Hattie Dizmond  Thank you for responding. I have a few assignment contracts and a few purchase contracts. I'm not sure what contracts to use when doing wholesaling and fix & flip. 

@David Battle You will have to know the specific laws in KS. However, in Texas, it is legal to assign any contract, unless the seller's terms specifically forbid it, such as with most REO's. The contract I use to secure the property, so I can wholesale it, is the standard TREC 1 to 4 Residential Purchase Contract. In the purchaser's name space I list "Hattie Dizmond or assigns". I don't have to include the "or assigns" in Texas, but it eliminates any confusion.

The Assignment Contract is executed between myself and the Investor Buyer I'm wholesaling the property to as the end buyer.

If you're doing a flip or a buy & hold, you simply use a standard purchase contract.  

I don't know what is customary in KS, but you can get an idea of an official form here. This is the link to the TREC 1 to 4 Residential Purchase Contract. (1 to 4 simply means it is one to four units. Anything over a 4-plex uses a MFR contract.)

@Hattie Dizmond  Thank you for responding. Do you use two separate contracts for when you're purchasing the property from the seller and when you're selling it to a buyer?

@David Battle  

I never actually "sell" the property to the investor buyer, except in the rare occasion I need to perform a double close.  In that case, I don't necessarily have to have a purchase contract with the investor buyer.  We can usually just provide the details to the title company who can draw up the closing docs from that information.  Otherwise, I have a separate contract with the investor buyer, but it's just the one page Assignment agreement.  Quick & dirty to say I'm assigning my interest in the Purchase Contract on the house to the investor buyer for a specified fee.

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