Assigning contracts. - Posted by Redline

Posted by Redline on November 15, 1998 at 21:10:34:

Well, I guess given this information I would prefer to assign the contract. Seems to me this would be a better and cheaper way to do things, no?


Assigning contracts. - Posted by Redline

Posted by Redline on November 14, 1998 at 13:30:28:

This message is similair to someone’s below and here’s my confusion:

I want to tie up a particular property and assign the contract.

  1. What protective clauses should I include to cover myself?

I was thinking about asking for a 2 week “inspection/show-my-partner” period in the contract that would allow me to back out in this time frame without problems. This would allow me to find a buyer. Also I would obviously state in the contract that I had the right to assign this contract. What else? Anybody have a ‘standard’ contract they use when doing this?

  1. Once I find a buyer:

Now I write up a different contract between the two of us: What does this contract look like? It’s kind of strange selling a property you don’t own yet. What if he backs out and I’m stuck with the original close date looming? When/how do I notify the seller that I’ve assigned the contract?

I understand this all in theory (which is the first obstacle) and now I have to understand how this all works on paper. I was thinking about talking to a lawyer about this but I don’t want to get a blank stare from the other side of a desk and have to pay $100’s of dollars to get it.

Thanks in advance,

Re: Assigning contracts. - Posted by Mr Donald

Posted by Mr Donald on November 14, 1998 at 15:36:11:

Are you assigning or doing a simultaneous or double closing here?

If assigning, you can step out of the transaction, and merely sign over your contract to the 3rd party - for a fee of course.

In your original contract, you would want a clause that the Seller would agree to “hold harmless” the Buyer (meaning you) in the event of assignment of the contract.

This should allow you to walk away with your fee from the 3rd party, and free you of any responsibility should they fail to close on the contract.

It’s certainly cheaper than a double or simultaneous where the closing costs and fees can eat away at any gains you may have hoped to achieve, unless of course you’re buying at or near wholesale prices.