Mark in St. Louis 0 Report post Posted February 2, 2004 I have a signed pure option agreement with a seller for $370,000. FMV for the home is $380,000. I have a party interested in buying the home. Which of these two methods would be the best way to proceed: 1) Just assign the contract for a quick $3K - $5K? What is required to do this?Is it just a one page assignment of option?Do I need an attorney or title company to do this or can this just be a tabletop deal?By the way, I used the pure option agreement in MC's course. Is that assignable? OR 2) Should I try to sell it to them for $380,000? What is involved in a sale to get this done?Do I do a purchase/sale agreement between me and the buyer?How are these closed? Do I involve a title company?Is it a dual closing? If so, do I close with buyer first?I've never done one of these so I'm a little in the dark here? Thanks! Share this post Link to post Share on other sites
Adam King (MI) 1 Report post Posted February 2, 2004 Mark,I would just assign the option before they close. I wouldn't look to get rich on this one either because there's basically no equity. Closing costs/other fees will chew up almost all of it.If a contract does not specifically say it's "non" assignable, then it is assignable. If for any reason the contract does say it's non assignable, take out that verbiage and have the seller sign it again. (They only care if it closes) Then assign it to the buyer for a fee. I usually always assign them before closing.Hope that helps,Adam Share this post Link to post Share on other sites
Mark in St. Louis 0 Report post Posted February 2, 2004 That's pretty much what I was thinking as well Adam. What would you try to get as an assignment fee? I was thinking of trying to get $3K to $5K. I've only had the contract for 5 days and have only spent $50 on bandit signs so far. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 2, 2004 Congratulations on another deal, Mark! What Adam said: with only a $10K spread in the deal, I think you're much better off taking what you can get as an assignment fee and just flipping the deal for whatever you can get. How much is that? Can't say. Let the assignee tell you what he/she is willing to pay for it. Again, with only a $10K spread, that amount won't be too much. On the other hand, so what? $1,500 or $2,500 ain't such a bad thing considering you are paying full price. With a potential buyer already lined up, and only $50 marketing invested to this point, I'd call it a smart deal for you.What is required to do this? Is it just a one page assignment of option? Do I need an attorney or title company to do this or can this just be a tabletop deal?Yes. Use the Assignment of Agreement document, along with the Pure Option Agreement, Mark. No need for attorneys or title companies with an assignment. This is kitchen table doable. Cold beer optional.By the way, I used the pure option agreement in MC's course. Is that assignable?Indeed. Review paragraphs 6 and 9. Share this post Link to post Share on other sites
Adam King (MI) 1 Report post Posted February 2, 2004 Mark, Let the assignee tell you what he/she is willing to pay for it. Again, with only a $10K spread, that amount won't be too much. On the other hand, so what? $1,500 or $2,500 ain't such a bad thing considering you are paying full price. With a potential buyer already lined up, and only $50 marketing invested to this point, I'd call it a smart deal for you. Ditto.... Share this post Link to post Share on other sites
jseamless 0 Report post Posted February 3, 2004 now if Mark had $50,000 in equity at stake, what would be his best route? if he could get the seller to sign a performance mortgage which would expire at the end of the option period? how would he then word the mortgage if he did not know exactly what the house would sell for? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 3, 2004 Joshua, with a $50K piece of equity it would surely be the better move to do a double close and cash in at the closing table. I don't see a need for a performance mortgage in this scenario. You complete a Purchase/Sale agreement with the homeowner, another with your buyer, present them to the title company and let the wheels begin turning. Share this post Link to post Share on other sites
jseamless 0 Report post Posted February 3, 2004 If the buyer was getting a mortgage would the bank raise a issue with closing with you, since you are not on the title? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 3, 2004 You are referring to the seasoning issue which may pop up on occasion. Some lenders require you to be on title for a certain period of time. Others pay that no mind. To avoid this problem everyone involved should work with an experienced mortgage professional who has access to lenders with no seasoning requirements. It's really not that big an issue if everyone is on the same page and working towards the same end. Share this post Link to post Share on other sites
jseamless 0 Report post Posted February 14, 2004 Michael, I was just reading your post. If you do a purchase agreement with the buyer and another with the seller do you need to get the deed into escrow before hand? Share this post Link to post Share on other sites
MichaelC 160 Report post Posted February 14, 2004 Are you referring to a typical sandwich lease deal which ultimately goes to closing? If so, then no, it is not a requirement to have the deed in escrow before hand. Share this post Link to post Share on other sites
jseamless 0 Report post Posted February 14, 2004 I was talking about a retail flip. You get a purchase and sale from the seller than the new tennat buyer, should you have a deed in escrow at the point? Share this post Link to post Share on other sites
