I'm a real estate agent in Los Angeles and I'm working with some flip clients. They want to know if they can assign their contract (for wholesaling purposes) in escrow without the seller's approval of the assignee.
Other agents I talk so say you need the seller's approval, others say they've never heard this question before. I'm new to working with flippers and don't want to mess this up.
Any thoughts? Thanks!
The standard CAR purchase agreement is not assignable without seller's permission unless you have added language to that effect.
Here's how to handle: Get the potential assignee comfortable enough with the deal to be ready to go forward with no contingencies. Then, have a lawyer draft a document which does the following: assigns contract to assignee and removes assignee's contingencies, all conditional upon seller's approval. Have the latest draft a side agreement between assignor and assignee which spells out how / how much assignor will get paid by assignee if deal closes (don't show this one to Seller).
Seller will probably be OK with approving assignment if, in doing so, assignee simultaneously removes contingencies. That way, seller knows the deal is happening.
Hope this helps.
Thanks! So is the seller approving the assignment in general or is the seller approving the assignee?
Join the Largest Real Estate Investing Community
Basic membership is free, forever.