I’m asking because I have a deal. The owner says we will go to a notary and get the lease option contract motorized. Though since I’m wholesaling it, I thought it needed to go to a attorney in order for it to be closed and finances sent out to each party. Can someone help me out please!
Whoa! Hold your horses.
I'm guessing that you're the buyer? You need at least 2 and better the 3 documents. Do not combine them. Go read up on lease options somewhere.
1) lease (you're leasing the property, right?) - contract not notarized; covers your possession of property as a tenant
2) option - contract to buy - also not notarized normally - usually shows all the terms of the future purchase: term, price of option itself, price of property at future purchase, financing, rent credits, last day to exercise the option (make the purchase), rights to extend the option (or more likely not without more money), etc.
3) memorandum of option - YES notarized because you want it recorded (but the owner often doesn't because it shows his property is tied up by you). The Memo shows that an option exists and clouds the title so the owner can't option or sell it to anyone else during the term. But do NOT put the price in the memo - you might want to sell the option for a higher price somewhere down the line. It should show the term (so it is not a permanent cloud on the title). If you forget this, you might end up in a quiet title action in court (lawsuit to clean up the title).
Some realtors try to get you to use an all-in-one lease/option form - really bad idea. An option can exist even after lease is done or you may continue to lease even after option expires. Thus why documents should be separate. And you better calendar the expiration date, because once it expires it's over. Plan on exercising the option quite a bit before the end - what if owner moved and you have to find him/her? (You can get a new one or the owner will sell to someone else probably at more money.)
@Gabriel King You're not closing the deal as the buyer, you're assigning it, correct? Assuming your paperwork is done correctly it's a fairly straightforward process. Certainly not anything that requires an attorney.
@Mary Cronin ok that’s great information I appreciate the help.
What I am doing is assigning my contract. My question is for the closing aspect of the deal. Would I need to go to a real estate attorney or would a notary work? Or how would I go about closing the deal?
@Michael Carbonare . My end buyer says he’s like to go to a attorney though and the owner really isn’t familiar with them. So would I need a attorney or what? Also how long should I give my buyer as due diligence?
You as the assignor don't need an attorney. The assignee, (the buyer), closes with the seller. You collect your assignment fee and step out of the deal.
@Michael Carbonare ok how do I do that? Do I just get the buyer to hand me a check when he signs the assignment? Or what?
Also do you have a contract I may use?
I guess I haven't figured out what you're doing.
All a notary does is verify who the person is that is signing a document. They don't guarantee that the signer is authorized to sell - only that Joe Smith is identified as Joe Smith.
An attorney can do whatever he/she is legally required to do to complete the sale, but a lot of other people can do parts of what an attorney does - printed forms from Office Depot, forming an LLC by Legal Zoom (or any state secretary of state website, etc, escrows by an escrow company or a title company.
If you're doing a double closing, a title company or an escrow company may be what you need.
In CA, attorneys are rare in typical RE deals, even though it's standard in the Eastern states. Very common in major commercial deals and almost never in residential deals in CA.
A notary acknowledges signatures on any document that is or might be recorded - deed, deed of trust, Memorandum of Option, Affidavit of Death of Trustee, or other Affidavits.
When you multiple sides of a sale (double closings and such) an escrow company is almost essential. They assure that loans are paid (or identified), deeds and deeds of trust are recorded and monies are allocated as required.
Does that help?
@Mary Cronin yes is does. I’m thinking I’ll need to open a escrow account and get everything done with a attorney.
Yes to escrow. I don't know if you need attorney. Where are you? How big is this deal?