Wholesaling Vacant Lots: Assignment of contract specific question

[Davis Marsh]

I currently have a vacant infill lot under contract. The offer to purchase contract is written in a way that specifically lets me assign and or market the contract to another buyer. But I am a bit confused on the logistics of assigning the contract to another buyer.

Once I assign the contract to another buyer, I don't receive and assignment fee until they actually close with the seller correct? So there is nothing that is really keeping them from exiting the contract just before the due diligence period ends, and basically screws me out of the original contract with the seller right? I am being paranoid, but I like to know all the potential outcomes. 

Also, do you have any contractual obligation once you assign over the contract? Like say you assign it, then the buyers back out, does the contract default back to you or is the whole deal folded?

Thanks for any clarification, Im obviously new around here. 

[Tom Gimer]

@Davis Marsh Unless it is a true assignment the original contract purchaser is not relieved of any liability. Assignor should always have back-up plans should the assignee fail to close. The settlement date in the PSA should be later than in the assignment, etc.

The assignment agreement should include language to the effect that its terms supersede any conflicting terms in the original contract. Any contingencies in the contract should apply to the original purchaser only. The assignee should be forced to do all due diligence before contracting. The assignee's EMD should be non-refundable if the seller can deliver clear title. There should be clear language regarding EMD forfeiture and disbursement.

I also include language in the assignment agreement reserving the right to double close. That helps if the seller or the assignee have a change of heart when seeing the numbers for an assignment.

Good luck.