How to structure contract for Wholesaling deal - Washington State

Question

We have talked with Chicago Title's senior escrow professional, and they told us it is not possible to structure a contract using "and/or assigns" with a simultaneous close in the state of Washington. Or, more importantly, we have to show funds available to close before we assign or switch to the new owner.  Is that truly the case? We have talked with Mortgage lenders and no one in the Greater Seattle area seems familiar with the concept of wholesaling. Can anyone point us to a title company that has experience with a wholesale contract? Or is WA state better for flipping, the BRRRR method and/or wholetailing?  Thank you for ANY help you can offer. Carin and Rod

Scott Egbert · Answer

I double close all the time in WA.  It's not a problem.  Feel free to call me.

Kevin Romines · Answer

I closed a transaction a few months ago with a standard MLS purchase and sale agreement with and / or assigns. The 1st title company I took it to, told me that it was actually 2 closings and I would go on title for a short window and then sell to my buyer. I promptly left that company and went down the street to the other title company.

I walked in with my paperwork and said it was an assignment, they agreed, prepared the closing and we closed a week and half later. They wired the money to my account. Done and done.

Title / escrow officers are not used to closing these types of transactions. They close all the standard transactions, so its their lack of experience that gets in the way. For some title companies, they have internal rules that may prevent them from doing the transaction.

Keep in mind, in Washington you must order the title report from a title company in that county, however escrow can be handle by anyone licensed in the state? That might help if your running into issues down the road.

I would just get on the phone and call every title company, ask to speak with their senior escrow officer and ask them if they can do assignments and double closings. Within a short time you will know who to go to and who to avoid. I hope this helps?

Steve Vaughan · Answer

Uncle WA thanks you for double closing. Excise tax x2. That's 3.4% every time!

I've always just assigned. Cross out Not in the assignable clause and initial if using the NWMLS  PSA. The incompetent title folks are doing you a favor not double closing in WA.

Carin Moore · Answer

That makes sense. Thanks, @Steve Vaughan!

Pete Perez · Answer

@Carin Moore

You can always assign a contract unless it says otherwise. This is coming from a local attorney I talked to. You can double close, or assign. If you double close you need to have the funds available. You can get pre approved through veristone, or any of the other hard money lenders in our area.

Nick Wood · Answer

Hi there. If using a standard form 21 purchase and sale agreement for the contract. Then using form 32 to assign the contract... where does the assignment fee go? Form 32 just assigns the contract, but there's not a place to put the assignment fee. About to have my first deal under contract... thank you in advance for any advice.

Alice Hakizamungu · Answer

Would someone take me under their wing and be my guide. I’ll really like to team up with someone and really learn the process.

Carin Moore · Answer

Thank you, Steve G. We are just now trying out some investor groups in the area and will get the chance to network with other wholesalers, I'm sure!

Scott Egbert, thanks for offering up some advice via  quick call.  Rod will be giving you a call this week!

Kevin R., your suggestion was smart to call on multiple title companies. We have talked with two and will keep trying. We really appreciate your very specific ideas that you shared!

Thank you Pete Perez and Ellis Jackson.

Very impressed by the response from the BP community. Let's do this!

Ellis Jackson · Answer

also in order to do simultaneous close you need transactional funding as your actually using funds from b to pay a and c to pay b. In practice it's basically back to back close as far as wholesalers are concerned. But there is technical difference and legal difference.

Ellis Jackson · Answer

you can do back to back close in wa. Just tell them you want a simultaneous close.  You can "assign" but if it's off the mls. The realtor will insist on using their contracts which is only a purchase agreement.

How to structure contract for Wholesaling deal - Washington State

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