Hey guys, today i have a question about assignments of contract. I have being thinking about doing assignments of contract to start gaining some confidence and of course "money" in Real Estate. I have a purchase agreement form and assignment of contract form, that i will use soon to assign a properties to cash buyers. My question is: Does the assignee have to sign the purchase agreement? or is just making my buyer sign the assignment of contract enough for the cycle to be complete?.
The purchase agreement is between the seller and you. The assignment contract is between you and the person to whom you are assigning the contract. Your buyer does not have to sign the purchase agreement. (Of course, the caveat that I am not a lawyer, am not providing legal advice, and that I recommend you have a local lawyer review the specifics of your contracts applies here.)
The minimum legal requirement is for the buyer to sign the assignment of contract along with you, the interim buyer. However, there may be ramifications and liability to you if the new buyer fails to close.
I recommend additional agreements between you and the buyer to ensure that the buyer agrees to hold you harmless. They should also agree to indemnify you (cover any expenses in case you get sued). In exchange, you may need to warrant that the agreement of purchase and sale is valid. This may require an estoppel certificate from the seller.
I know that this is starting to sound complex. But you're not selling a property. You're selling a contract for thousands of dollars. That contract better be of high quality. The $10 version of the internet, or the one you got in a 3 day seminar isn't high enough quality in my opinion.
I've done several assignments in various states and provinces. The protection is in the additional agreements. Get good legal advice.
Good agreements cover what happens when things go wrong.
Thank you Jeff and Victor. I appreciate You response to this question. The truth is the contract i got is from an online source, and don't know neither think is strong enough. I know you guys aren't lawyers, but any advice on how to go about finding a good strong contract?. would a Realtor be able to help me with this?.
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