Experienced real estate investors always talk about how easy it is to go about assigning a real estate contract. However, they always seem to gloss over the necessaries of actually doing this in real life. Assigning a real estate contract seems like an easy move, but the new wholesaling investor can find the idea is confusing. After all, how can you assign a contract when you don’t even know what to do to accomplish it?
Assigning a Real Estate Contract is Simple
Perhaps the reason that so many real estate investors don’t delve into assigning a real estate contract, is because it’s so simple. They just forget about the topic in the larger scheme of real estate wholesaling.
You’ll be surprised at how easy it really is to assign a contract to a buyer. Assigning a real estate contract is ‘giving up’ your right to purchase a piece of real estate by selling that right to another investor, your buyer. The contract that you assign is the original purchase agreement that the homeowner signs with you.
You may be worried that you’ll have a hard time getting your hands on the documents and contracts required to wholesale a property. There are plenty of places to get purchase agreements and the other necessary documents for a real estate transaction online. These documents are perfectly legal. Just be sure to read over them to make sure you understand what they say. A contract doesn’t need difficult languqge to make a legally binding real estate document.
When you actually assign that contract you’ll write in the buyer’s name on the original purchase agreement. The buyer’s name will be placed in the ‘and/or ASSIGNS’ sections, which you can either write in when first signing the document or create a document with a specific section for the ‘assigns to’ section. The buyer then signs his or her name on the purchase agreement.
It’s your responsibility to get that a copy of the assignment contract to the title company for the escrow process. This way they know that you’ve assigned the contract and can complete title change.
What’s Involved in Assigning a Contract?
You’ll make a few adjustments to the contract as you are signing it with the homeowner. Begin by adding the phrase, ‘and/or ASSIGNS’ after all the spaces where you, the buyer, sign your name on the contract. Also include a small section in the contract stating you are allowed to assign your rights to this purchase agreement to another buyer. Of course, if you look around, you can also find contracts that already include the ‘and/or ASSIGNS’ sections.
You’ll also need the ‘assignment contract’ to finish assigning a real estate contract. The assignment contract is the legal document between you and the buyer stating that you’ve agreed to give up your rights to the homeowner’s purchase agreement in exchange for a fee.
You should also be able to find this document on the web. It’s not difficult to write up if you can’t a copy of it online. Write the document stating that you agree to give up rights to the purchase agreement for the property at a certain address. Be sure to state:
– your full name,
– the homeowner’s name,
– the property price and
– the property address in your assignment contract.
Also list the fee you’ll receive from the buyer in exchange for your rights to the agreement to buy contract. When creating this document make sure to include; the dates, your signatures and a space for the notary to sign and validate the assignment contract.
Assigning a real estate contract is not difficult. You just need to learn the process once, and from there will be able to repeat it. Investors can assign a contract in real estate wholesaling, short sales and even the purchase of a home at full market value.