Assignment of Contract - Posted by Grace of IL

Posted by JohnBoy on June 07, 2005 at 10:30:07:

Realtors always ask for a $1000 or more. But there is no minimum amount that is required by law. What you tell the realtor is this. I’m an INVESTOR! I submit over 50 offers every month. If I put a $1000 up as earnest money on every offer I would have over $50,000 floating around every month tied up as earnest money earning no interest. The MOST I ever put up is $100. If you can’t understand and deal with this then I’ll just have to find another realtor to work with. A $100 as earnest money only requires me to tie up $5000 per month in earnest deposits. That’s a lot better than having $50,000 tied up month after month. You are not the typical everyday retail buyer that buys a house once or twice in a lifetime. You are an INVESTOR that buys as many houses as you can get! Therefore, your policy is only a $100 for earnest money which is 10 times the amount you usually put up. Usually you only put up $10. But a $100 is the max!

As far as having a letter for a preapproved loan, try this. Look, I understand you like to have preapproved loans in place from people so you know you’re not wasting your time, but I’m an investor and I have access to plenty of cash when I need it. I can get you a preapproval letter, but what is that really going to do for you? It doesn’t require me to buy anything. I can get all the approval letters you want. They mean nothing! I still have to agree to buy. I still have to show up to close on the sale. Unless I do that all the approval letters in the world are not worth the paper they are written on. I can get you hundred of them! I have a good mortgage broker that will write all the approval letters I need. How many do you need??? 1, 20, 50, 100…how many? None of them mean anything unless I close anyway. I’m not here to waste your time and I don’t expect you to waste mine! I’m a serious buyer and I’ll buy as many properties as you can find for me that meet my criteria. Are you interested in selling property or more interested in games with worthless letters?

If you need one and still want to work with the agent then get one from a mortgage broker. With your credit score you should have no problem getting one.

Why do you need to pull the equity out of your property? For what? If you are assigning your contracts you don’t need it for anything!

As far as when you get the assignment fee, that depends on your buyer. If you can, you get it at the time of assigning the contract. If the buyer wants to wait until closing to insure they get the property OK, then you require the assignment fee to be paid up front and held in escrow as a nonrefundable deposit subject only to the buyer getting clear title. As long as the buyer can get clear title its a done deal! If for any other reason the buyer fails to close they lose the deposit. If the buyer won’t go along with any of this find another buyer. You don’t want a buyer that isn’t serious or one who is just trying to tie up your contract until it expires so they can go around you and buy it from the seller cutting you out of the deal.

Assignment of Contract - Posted by Grace of IL

Posted by Grace of IL on June 06, 2005 at 14:31:02:


Assignment of Contract SEEMS simple that I think it’s too good to be true. The following are the steps that (I know of) that I need to take in order to do an assignment of K.

Please help me and tell me if I’m missing a step or steps and if you could refer to the missing step chronologically. Thank you very much!

  1. Find a property that would be profitable (preferably LTV of 65-70%).

  2. Tie property down by having a contract signed by me and the seller.

  3. Make sure that next to my name are the words “and/or assigns”.

  4. Have my contingency clauses. (One of the contingencies will include something about having a clear title and no upsets on the property.)

  5. Run an ad in the paper. (I understand that I am selling my contract, not the property.)

  6. Once I find an assignee, have another agreement between the seller of the property and the assignee to release me
    from the transaction.

  7. I collect my assignment fee from the assignee. (Do I collect at the closing table or do I collect after I assign the contract?)


a) When working with a realtor, he wants a pre-approval letter from a lender. My credit score is 700 but do not have cash to use for earnest money. Realtor is asking for $1000 as earnest money. I thought $100 would suffice but I am suggested to put down at least $1K. Any alternatives (besides getting a new realtor?)

b) Regarding the pre-approval letter, do I tell the lender that I intend to sell my condo and use the equity in it to use as a downpayment? (But I am not selling my place, but the goal is to get a pre-approval letter OR… would my credit score carry any weight and not show any proof of funds?) I want a pre-approval letter so that the realtor takes me seriously or a FSBO requiring one will be able to tell that I am not a “looky lou”.

c) Should I pull the equity of my condo? I have about $30K in equity. Should I do an equity line of credit?

Again, thanks a lot for the input!