Sample Addendum to End Buyers REO Flip?

[Daniel G.]

HI guys,

Wondering if anyone has an addendum to provide to the end buyer when flipping REO OR can anyone just list the best contigencies you use in your addendum?

I would like to see what everyone is using and implement that into mine and have my attorney review it. Thanks for your help in advance! :mrgreen:

[Scott Hubbard]

Originally posted by J Scott:

Originally posted by G Simpson:

Out of the 2 REO's I have flipped, both bank contract addendum's stated that I cannot transfer directly to an end buyer..has anyone seen this, or did I misunderstand the wording. This was not my purpose at the time so it made little difference to me.

Banks won't allow you to "assign" the contract, meaning they won't allow you to take the contract that you have with them and pass it on to another investor to close the deal.

That said, the bank can't stop you from immediately reselling the property to another person (a double close) or even selling at the exact same time as you purchase it (a simultaneous close). This takes the cooperation of the title company and closing attorney to accomplish, but there are many out there who will help you with this.

While it is true that most banks will not allow you to assign contracts, the more important clause is the bank not allowing the buyer to transfer title for 30 days. So, to that effect, I recommend putting in your Title and Escrow instructions a clause that requires the Title Company to address any transferability restrictions. If your using a REALTOR contract, then you need to make an addendum that stipulates your requirements for a title free of any restrictions.

If you cannot provide marketable title, you cant make any money!!

Good Luck!