I will be assigning the contract on a wholesale deal.
Purchase Agreement and Unsigned Assigment of contract is emailed to my cash buyer.
In Assignment of contract, the assigment fee will be payable as non-refundable $2000/- at signing of the contract and the remainder at the closing.
How will the cash buyer pay me the $2000/- when I sign the contract. Will he give me a check of $2000/- or he will give give me a photo of the check that he has given it to his title co or attorney.
Or I have to get an attorney/title company to hold the check.
Thanks for your input.
You should be choosing and setting up the title co. Closing. Most wholesalers want the check payable directly to them, with the only refund if the seller can't/doesn't close. Your buyer may want to deposit his $2k with the title co., I would.
You want to haveh him send it up to the title company. This way you have a thrid party witness who can verify the agreement between you'll is legit. In the case that the buyer can not perform then they will just pay you the $2,000. Let your title company be your guide.
A Good title company will hold your hand through the process with a smile on there face to gain your business they should understand the value of an investor because they will do repeated business on a bigger level than first time home owners.
I have started calling the Title Insurance Companies, not sure how much will they charge for this service.
Oncer I assign I will be out of picture.
Once you assign, you will Not be out of the picture. You will likely still be in contract with the seller. If you want the deal to close, you'll need to stay involved with all the details. What is the exact language, if any, in your contract with the seller regarding assignability of your contract? You'll need to know that the title co./closing costs are as your seller and buyer will both need to know who is paying what.
The $2000 fee should go into escrow and be paid to you at the time of closing. I hope you don't leave the seller high and dry.
Here are the wordings on assignablilit in my contract.
28. ASSIGMENT OF CONTRACT: Buyer may assign this contract, without restriction. In the event assigned, all rights, interests, suits, claims and titles in this contract will be assigned with assignor released from all liability.
Great question, if that happens I will pay the seller earnest money in the contract and I also have 2 other buyers lined up for the same property.
I will make this happen, this is about credibility. Also the buyer goes to the same club as I do.
Please also suggest how can I protect the buyer, I am a newbie and eager to learn from people like you.
To protect all parties please go through title and escrow.
From the advice on this thread I have been calling people to get an investor friendly title insurance company and was able get anmes of few Title insurance company and have also contacted an attorne.,
I will also deposit my Earnest money to the seller with the TI company even thiough I have opened a personal escrow account.
Joe, I hope you are happy with my approach.
Everybody thanks for help and input.
Thansk for educating me on this. This is my first deal and learning a lot from all of you. Having 3rd party to holds EM's was a great piece of information I got from all of you.
Thanks All Again.
My Cash buyer said not to use A title Insurance company for holding escrow but he insisted that I use an attorney to hold my escrow account.
What should I tell him, to convince him it is OK to use a Title Insurance company.
There is nothing wrong with a lawyer holding escrow.
Your buyer wants an attorney, his attorney, to hold the EM because when/if he bails he thinks he'll have more influence with his attorney.
Personally I would never do a deal, a wholesale deal that my people are not over looking. You have to be in control especially against attorneys(sorry it's true). The attorney is sure to tell you all types of legal reasons you cant wholesale. look in to the attorney before you do business with them.
I contacted an attorney who will hold the deposit money for me $100/- per transaction. Not bad.
Does any body have a standard assignment of contract for New Jersey.
I created one such form from YouTube presentation, which I sent to may cash buyer but the good thing is it is not yet executed.
One of the clauses in Assigment of contract says:
2. ASSIGNEE accepts all terms and conditions of the contract for Sale and Purchase between BUYER and SELLER in its entirety.
3. ASSIGNEE acknowledges receipt of legible copies of the original Contract for Sale and Purchase in its entirety including all Addendum(s) associated with this transaction.
Now in my Original contract I have an inspection contingency, which will also get passed to the cash buyer when I Assign the contract, so there is all the chance for this deal to fail if my buyer comes up saying there is more in repairs, or the inspection failed at which time he will bargain with the Seller and the seller may not agree to the new term, the deal will fail.
The contingency clause in the Purchase agreement is as follows:
11. Buyer makes this offer subject to and contingent upon a property inspection which, in sole judgement of Buyer is deemned satisfactory. Such Inspeaction shall be conducted within 21 days. If said inspection is deemed unsatisfactory by buyer, this offer shall be terminated and any earnest money returned to Buyer. However, negotiation of a revised purchase offer is not precluded, should the parties so desire.
What should I do so that the Purchase contract after assignment does not have inspection contingency, if I cannot remove the inspection contingency do I have to return the non-refundable deposit money obtained for Assignment of contract.
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