Assignment / Compensation fee help!!!

12 Replies

I have a property under contract and the seller is selling it lower than what we signed for. They are asking what are my commissions and fees. Because I am not a licensed  agent I cant accept commissions, correct? Do I negotiate a slightly lower deal to be assigned and be paid that way, or dont worry about it. 

@Walter Pape 

is he selling it to you for lower than your contract price?  Or is he going outside your contract to try and sell it?

@Mike Flowers 

Im selling it at a lower contract. 

The buyer is going through me

why would you sell it for lower than what your contracted price is?  YOU DONT MAKE MONEY THAT WAY

Can you clarify you question a bit. DO not give specifics about the deal but, make up some figures and give an example of what you are talking about. 

It sounds like you are paying to sell a property and that would net you nothing. In fact you would be losing money. 

I made a mistake of not doing a complete walk through. This is my first deal. Learning as I go

Do you have any escape clauses? do you have a good enough relationship go back to the seller and explain that the numbers do not work and you need them to sell at a lower price? granted they probably won't be it's worth a shot if you don't have any escape clauses in your contract. However if you have no escape clauses, and can't get the seller to change the price, you are going to be on the hook for the property at that price you agreed upon, and then have to come to closing with money for the end buyer or buy the property yourself depending on your verbiage in your contract, I may be wrong, wait for others to chime in.... but it mostly depends on your original contract i believe.

Originally posted by @Mike Hicks :

Do you have any escape clauses? do you have a good enough relationship go back to the seller and explain that the numbers do not work and you need them to sell at a lower price? granted they probably won't be it's worth a shot if you don't have any escape clauses in your contract. However if you have no escape clauses, and can't get the seller to change the price, you are going to be on the hook for the property at that price you agreed upon, and then have to come to closing with money for the end buyer or buy the property yourself depending on your verbiage in your contract, I may be wrong, wait for others to chime in.... but it mostly depends on your original contract i believe.

 Mike is correct. If you do not have the out clauses in your contract, you could be stuck buying the property. A couple of follow up questions.

1. did you put any earnest money down?

2. How much of a difference if the buyer going to pay you. Can you talk to the buyer about the deal and negotiate a better price?

3. Have you spoken to the buyer about possibly needing to renegotiate or back out of the deal?

I may think of more questions but, these are my first ones. 

So...you agreed on a price (your contract price). And the seller is trying to sell it on his own lower then the price you agreed on (the contract price)? I would just tell him "that's fine we can sell it lower then the contracted price, but we have to negotiate that price within the contract too." You can't just try to sell it outside the contract. Once he signed you have control of the property for (however much time it is). 

If you have an inspection clause in there you can easily just walk through and be like "yup, this property isn't worth as much as we negotiated." Then you can re-negotiate the contract. I've heard of wholesalers that ask what the owner wants for their property and gives them agreement no matter what or how crazy their price is. Because it gives them time to go look at the property and then they can re-negotiate a price.

makes sense . Thank you for your help. 

Updated over 3 years ago

To answer some of the questions: The contract clearly stated that I am going to find an end buyer. If I did not find a buyer then I am not liable to buy the property. I am working with the buyer and seller to find a solution that everyone agree to. Tha

My tactic is going to be (and my first deal, had it not fallen through would have gone this way) is to get a property that has a motivated seller. Then connect with another wholesaler in the area where the house is(I do virtual wholesaling too) and tell them I'm willing to do a 50/50 deal. I pull comps for that house then get seller to sign contract for a price we agree on and then work with the other wholesaler to do a walkthrough and to also help move the property to a rehabber. Of course you have to sign a joint venture agreement before you do this with another wholesaler.

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