Posted by Joe Kaiser on November 26, 1998 at 24:14:53:
I assign it right then and there, no fuss, no muss. I’ve got everything “packaged” so my investor can step right into my shoes knowing exactly what’s what with the property. That’s part of the process of earning the money.
Joe
HELP!!!(Bud, Bill Bronchick, others)…please - Posted by Scott
Posted by Scott on November 23, 1998 at 20:12:38:
I have a 4-plex under contract and ran an ad to flip it. I have had a couple that own 65 properties hot on it since I ran the ad. I told them I would be assigning a Purchase contract. We met at the property tonight so they could inspect the inside and afterwards they made me an offer, but it was $6000 lower than asking and when I countered they only came up $1000. I soon found out that they had contacted the sellers and obtained the figure I had put it under contract for. So, they tried to cut me a VERY skinny deal when this property is worth 18-20K more than what I contracted for. I told them I wasn’t surprised that they had contacted the sellers, but that the price I had contracted for had nothing to do with what they should be offering. In other words the property is worth what I was asking, they just think I shouldn’t make more than $1500 for a few days work and since they know the contract price, that is where they stand.
I have these questions: Can I avoid this from happening again so that I don’t get beat up on price?(possibly a gag order/stipulation in the contract)
Is it customary to wait until closing to receive your assignment fee? (they balked at paying up front in case the title wasn’t clear)
Thank you
Scott
Kissing frogs . . . - Posted by Joe Kaiser
Posted by Joe Kaiser on November 23, 1998 at 21:16:03:
Clearly, they don’t feel they need you around for any future business. Tell them “thanks but no thanks.”
Keep at it and eventually you’ll end up with a handful of wholesale buyers you know you can trust and who will just write you a check. I don’t bother with escrowing their assignment money or anything like that. Instead, I get all that other stuff (like title) taken care of up front so by the time they see the property, they have all the information they need in order to say either “yes” or “no” to my sale proposal.
That’s “yes” or “no,” not . . . “wouldja take $xxx.”
After hearing “no” from a couple “wouldja take’s”, they figure out that I’m pretty serious about this stuff.
Frankly, that’s why you have more than one wholesale guy.
With all the documentation at hand they are able to accept and cut a check right on the spot. From then on, you’re outta the loop and if they screw it up it not your problem whatsoever.
Joe
Re: HELP!!!(Bud, Bill Bronchick, others)…please - Posted by Bud Branstetter
Posted by Bud Branstetter on November 23, 1998 at 20:41:13:
Isn’t $1500 a good profit for the time put into the deal? Are you greedy?
How that I have your attention, your mission if you chose to accept is to find a buyer that will pay what you feel it could sell for. The question also becomes can you close on this good deal without a buyer. Are they just going to wait until your contract runs out and buy it direct? On a typical wholesale flip the investor wants 15K or 20% of ARV. They weren’t asking for much different. You should be able to work up the figures for what a landlord/investor would make. Remember to market to an owner occupant also. Can your contract be extended?
I don’t think it would be feasible to gag the seller but you might think about recording a memorandum on your contract. One way to counter the title problem is to have the whole amount down put into escrow and make it non-refundable subject only to no title defects on the property.
This really should not have been a negotiable price. Move on to the next buyer if the first doesn’t want to buy. Easy to say, hard to do it you can’t close yourself.
Re: Kissing frogs . . . - Posted by Redline
Posted by Redline on November 25, 1998 at 11:44:39:
Joe -
So you just assign it right there and get paid before the close? Sounds good but: what do you do to prove to the sellers that there is clear title. do you actually have a title policy at this point??
Thanks,
RL
Thank you Bud and Joe - Posted by Scott
Posted by Scott on November 23, 1998 at 23:04:24:
I really appreciate your help. I’ll let you know how it turns out.
Scott