Wholesale contract example? Seller and Assignee only
Hi - I'm looking for clarification on wholesale contracts. Each contract example that I've seen has three parties: Seller, Assignee and Buyer. If I understand the process correctly, I, as the Assignee, will first enter into a contract with the Seller. Then later enter into a contract with a Buyer and bring the two together in a double close transaction. It seems like this process would require TWO separate contracts. Does anyone have an example of a contract just between the Seller and the Assignee, before there is a known buyer? Or do I have to sign a Purchase Agreement between me and the Seller? If that's the case, how do I protect myself and get out of the agreement if i can't find the right buyer?
Hey @Meg Roman I know it's kind of confusing. You need two documents to wholesale a property: 1. Purchase agreement 2. Assignment contract
I have uploaded both of these here on BP. At the top of the page, go to tools>fileplace>contracts and you'll find them there.
On the purchase agreement I've uploaded, you fill your name in the very first blank space, that's it on the first line. Then fill in everything else (seller info, etc.), and at the end of the 3rd page where there are multiple blank lines, write "Subject to partners approval within 15 days of the date of this contract." This way, if you can't find a buyer, you can say your "partner" who is imaginary of course, didn't approve this purchase and all you lose is whatever earnest money deposit you paid. DON'T get tricked by sellers into thinking you have to give them a huge earnest money deposit of $2,000-$3,000 or more. I NEVER do that, and I wouldn't recommend you do it either. Put $20 in the contract. I do, and if they don't accept it when I am trying to help them out of a bind, then cancel it and move on to the next deal.
On the assignment contract, you are the "Assignor/Seller" and the cash buyer is the "Assignee/Buyer." Always get a NON-REFUNDABLE deposit of at least $2,000 from your cash buyer. That way, if they flake out on you and back out or can't close, you still keep their deposit. If they ever come back to you after bailing on a deal, I double the deposit to $5,000 because they are unreliable. If they do it again, raise it up to $10,000 or just don't deal with them at all any more.
A double close costs about $2,000-$3,000 to do. That's when you do two closings on the same day. A to B (Seller to You) and B to C (You to Cash Buyer). You really only want to do that if your charging a huge profit on a deal (Anything over $10,000) or if you have a deal that can't be assigned, like a HUD maybe or a Fannie Mae deal. Hope I cleared it up for you.
Thanks Chris - that does help. I will go out to look at the templates. Thanks for sharing them!
@Chris PiperHey I downloaded both of your contract; very helpful.
I just have a couple of questions if you could help me out..
What do we write in on #9 for the Purchase Agreement? and for #1 of the assignment contract, what goes into each slot? Is the first one a non-refundable deposit, and the second the whole fee you expect to receive minus the fee they already gave you?
Thanks in advance
@Alessandro Baldassarre You leave #9 blank on the purchase agreement, and for #1 on the assignment agreement you put your "Total" assignment fee in the first box, and the amount of the deposit you want from the cash buyer. I usually ask for $2,000 for the deposit.
The best thing to do is to print out both the assignment contract and the purchase agreement. Then, fill in everything you can to use over and over again. Fill out like your info, sign them, fill in the deposit amount, etc. Then scan it into your computer, so next time, all you have to fill in is the property address and a few small things. It will save you time.
@Chris Piper, Thanks for the templates; super helpful. Quick clarification question on the assignment contract, above you mention the non-refundable assignment fee which I believe is the first blank and then the second blank will be used for the remaining balance upon closing?
Want to ensure I am thinking about this the right way.
Thanks again!
@Chris Piper This is information is most helpful to a newbie like me! Thank you for sharing. Are these templates still available?
@Chris Piper Thank you for the great information! I am working on a contract now. Can you please tell me if the templates are still available?
#5 Wholesaling Contributor
- Real Estate Broker
- Naples, FL
Piper appears to be long gone...and IMO not missed. He was great at providing information to deceive sellers .
Originally posted by @John Thedford:Piper appears to be long gone...and IMO not missed. He was great at providing information to deceive sellers .
I agree. Asking for the $2k was the red flag for me.
However I am in search of some fillable contracts to get me started, both seller and assignment. Found a house and working on the seller. Already have a buyer that is highly motivated and want a couple options on hand when a seller gives me the green light.
Originally posted by @Galen Ribellia:Originally posted by @John Thedford:Piper appears to be long gone...and IMO not missed. He was great at providing information to deceive sellers .
I agree. Asking for the $2k was the red flag for me.
The $2k was the deposit that he required from an end buyer/investor to secure the property from open market to other buyers/investors. It has nothing to do with the Seller.
Are these contracts still available? Thanks
If anyone needs an assignment contract or a purchase and sale agreement, message me and I'll send it to you.
@Nick Walts Thanks for jumping in and explaining what John Thedford was too much of an imbecile to understand. A deposit from a cash buyer is pretty standard these days and has never been a problem for me. All he ever did was say I was shady and trying to screw sellers over., which is a complete lie. I'm very honest and upfront with everyone involved. Not sure how he's even involved in real estate in any capacity since he clearly doesn't understand how wholesaling works. Anyway, thanks again!
UPDATED May 26th, 2020:
Assignment Agreement Download
https://www.biggerpockets.com/files/user/ventekrealty/file/assignment-agreement-for-wholesalers
Purchase and Sale Agreement Download
https://www.biggerpockets.com/files/user/ventekrealty/file/purchase-and-sale-agreement-for-wholesalers
Thank you Mr. Piper, Yes please send me a resale (purchase and sale agreement contract) and a assignment contract ASAP. I have a appointment with the owner in two days. Can't find the contract downloads mentioned on BP.
Where do I find the contracts mentioned? I went to tools as mentioned and can't find it there.
Hello. Thanks for all the great info. I am not able to download the contract templates. Did they expire?
Originally posted by @Chris Piper:Hey @Meg Roman I know it's kind of confusing. You need two documents to wholesale a property: 1. Purchase agreement 2. Assignment contract
I have uploaded both of these here on BP. At the top of the page, go to tools>fileplace>contracts and you'll find them there.
On the purchase agreement I've uploaded, you fill your name in the very first blank space, that's it on the first line. Then fill in everything else (seller info, etc.), and at the end of the 3rd page where there are multiple blank lines, write "Subject to partners approval within 15 days of the date of this contract." This way, if you can't find a buyer, you can say your "partner" who is imaginary of course, didn't approve this purchase and all you lose is whatever earnest money deposit you paid. DON'T get tricked by sellers into thinking you have to give them a huge earnest money deposit of $2,000-$3,000 or more. I NEVER do that, and I wouldn't recommend you do it either. Put $20 in the contract. I do, and if they don't accept it when I am trying to help them out of a bind, then cancel it and move on to the next deal.
On the assignment contract, you are the "Assignor/Seller" and the cash buyer is the "Assignee/Buyer." Always get a NON-REFUNDABLE deposit of at least $2,000 from your cash buyer. That way, if they flake out on you and back out or can't close, you still keep their deposit. If they ever come back to you after bailing on a deal, I double the deposit to $5,000 because they are unreliable. If they do it again, raise it up to $10,000 or just don't deal with them at all any more.
A double close costs about $2,000-$3,000 to do. That's when you do two closings on the same day. A to B (Seller to You) and B to C (You to Cash Buyer). You really only want to do that if your charging a huge profit on a deal (Anything over $10,000) or if you have a deal that can't be assigned, like a HUD maybe or a Fannie Mae deal. Hope I cleared it up for you.
Hi @Chris Piper, I think you may have updated your contracts because I was trying to follow your direction for filling it out but the first blank line of the purchase agreement is for the date and not a name. Can you please (and I know this is asking a lot, so very sorry) go through the updated purchase agreement and assignment contract, line by line for people like me 🥵😳, lol. I would be eternally grateful! Thanks 😊
Originally posted by @Randall E Collins:Where do I find the contracts mentioned? I went to tools as mentioned and can't find it there.
See link to contracts a few posts above..
Originally posted by @Chiquita Jordan:If you have Acrobat, just click on/tap the printer icon and choose Acrobat and then Import to Acrobat.Hello. Thanks for all the great info. I am not able to download the contract templates. Did they expire?
Originally posted by @Chiquita Jordan:Hello. Thanks for all the great info. I am not able to download the contract templates. Did they expire?
@T M.
I also tried retreiving the documents and there are no longer present when I visit the provided link. Is there someone that can assist with locating the "Assignment agreement & Purchase and Sale agreement"?