how do you explain that you will be assigning contract

Question

is it necessary to inform seller you will be assigningcontract, and if so does anyone have a diplomatic way to explain.  Also, who determines the earnest deposit amount?

Jim & Michele Wilcox · Answer

If you are assigning the property - it will state that in the contract - and it should state that in the contract. So, when you are going over the contract with the buyers, you will talk about that clause. You'll tell them that you have partners who might like to purchase the home from you or you know other investors who do rehabbing that might want to purchase the home, or you might rehab it yourself.

If the Sellers are eager to get out from under - they will understand. As long as they feel they are getting a good deal - they will not care what happens after they get their money or ??

Explain it up front though and make sure you have an assignment clause in your contract. People say sometimes that if it doesn't say it - it is implied. It's better to be upfront and state - "John Doe and assigns".

As far as earnest money ... you can decide that yourself. If you want to give the Sellers some good faith money, do so. The amount doesn't have to be a lot. Then they can get the rest AFTER the closing and AFTER they move out.  Some people give them nothing. I think giving some money gives the Seller a better feeling about the deal. Many deals don't even involve money to the Seller because they are so far behind on payments. In that case, some people will give them "moving money".

Good luck.

Ryan Webber · Answer

If you are assigning the property then the seller will atleast know when they look at the HUD1 at closing.  For this reason it is better to atleast prep them for the occasion.  I normally double close on my properties for this reason and several others.  I always do explain to them that we will be either reselling their property or renting it out, but I don't tell them that hopefully I will have it sold before we close.

There is no predetermined earnest money amount.  I normally do not put any earnest money on a contract when I am buying, but I normally require a $1,000 when I am selling.

Tom McGiveron · Answer

both parties figure out everything.  it comes down to being able to have each party's needs met.  if it's a true win-win situation, then you'll work it out with the seller.

the principle of substitution applies, which simply means that no one will pay more for a property if an equally desirable one is available for less.

ultimately, the buying public dictates what the market will be.