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Craig

What Forms Are Required

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Please confirm. When you write the contract for a CA you use the numbers the homeowner needs plus the rent credit total plus the option money. This applies for term of the Residential Lease and option.

 

This brings the adjusted figures back to what the homeowner needs out of the property.

 

The reason I question this is there is a sentence on page 25, Paragraph 2.

 

Your goal is to assign the contract subject to owners approval and keep the assignment fee. Working within the terms gets price " rule, if the homeowner insisted on $200,000 you would be arranging a lease purchase price of $205,000. The tenant/buyers would be putting down $5,000 as the assignment fee which you would be pocketing as your fee to the homeowner.

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Your goal is to assign the contract subject to owners approval and keep the assignment fee. Working within the terms gets price " rule, if the homeowner insisted on $200,000 you would be arranging a lease purchase price of $205,000. The tenant/buyers would be putting down $5,000 as the assignment fee which you would be pocketing as your fee to the homeowner.

 

Correctmundo + Rent Credits of course.

 

e.g.

$200,000 - net to seller

$5,000 - option consideration (assignment fee, your profit)

$6,000 - 50% rent credits for a $1000/mo rent rate for 12 months.

$211,000 - the selling price written on contract that will be the gross purchase price for the T/B. When the T/B exercies thier option to buy, if they wait all 12 months, they will be paying the owner $200,000.

 

Merry Christmas

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Craig,

 

Remember that IF your seller sold fsbo or through a Realtor, the selling price is NOT what they'd receive (net). Is your seller demanding MORE than the property is worth?

 

Kim

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Craig,

 

Remember that IF your seller sold fsbo or through a Realtor, the selling price is NOT what they'd receive (net).  Is your seller demanding MORE than the property is worth?

 

Kim

 

Doesn't the tenant/buyer expect to pay more because of the lease/option and possible increase in value over the year? You wouldn't want it at the lower end how would you justify that?

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Craig,

 

YES! Your t/b should be paying more than it's currently worth due to terms and anticipated appreciation.

 

My question wasn't clear to you, is the seller wanting to NET MORE than Current Market Value? I ask, because you said, "numbers the homeowner needs," and you didn't reference the current value of the property.

 

Kim

 

Kim

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Do you need to sign two CA Assignment of Agreements??  One for the CA Lease and one for the Option??

Only one form, the CA Assignment covers both the Lease and Option.

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Do you need to sign two CA Assignment of Agreements??  One for the CA Lease and one for the Option??

 

 

Caveman:

 

I personally use two and I spell out which agreement is being assigned. My reasoning is that I want to keep the lease and the option separate. I also think that it adds some clarity to the transaction.

 

Is this overkill? Probably, but it works for me.

 

Gene

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I agree with Kim.

 

It is very clear that you are assigning everything the way Michael has the CA Assignment written.

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Every body gets a copy though, correct? One for you, one for the owner and one for the T/B.

 

Also, has anyone had a bad experience with the owner when he signs the assignment contract and realises how much you are getting paid? How have you handled this?

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Every body gets a copy though, correct? One for you, one for the owner and one for the T/B.

Everyone gets an "orignal copy," so everyone has to sign three identical copies.

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Also, has anyone had a bad experience with the owner when he signs the assignment contract and realises how much you are getting paid? How have you handled this?
JC, as of yet, no I personally have not had this problem before maybe because I get to the point right away before each deal with the homeowners.

 

I tell them "this is what YOU'RE gonna NET" and "ANYTHING OVER THAT IS MINE!" "any questions?" :wub: ... the negotiation ends there.

 

It really doesn't have to be a problem unless I make it a problem by not disclosing this to them upfront.

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Also, has anyone had a bad experience with the owner when he signs the assignment contract and realises how much you are getting paid? How have you handled this?

JC, as of yet, no I personally have not had this problem before maybe because I get to the point right away before each deal with the homeowners.

 

I tell them "this is what YOU'RE gonna  NET" and "ANYTHING OVER THAT IS MINE!"  "any questions?"  :wub:  ... the negotiation ends there.

 

It really doesn't have to be a problem unless I make it a problem by not disclosing this to them upfront.

I just had this identical conversation with someone. Bev's answer is right on. Full disclosure upfront will prevent any resentment when it comes down to crunch time, signing the papers and money exchanging hands.

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Along the lines of the thread, I have a question about the Short Offer Form/Letter that is included with the course. The letter mentions that the price offered is the NET that the seller will receive, but the short offer form has lines for selling price, option consideration, and rent credits. Should I put their net in the selling price and put zero for rent credits and like $10 for consideration? Or do I fill it out like it says and put the option price minus consideration minus credits? :wub:

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The NET referred to in the Letter is that the purchase price IS the purchase price -- there isn't anything (Agent Commissions, Closing Costs) to be deducted from it.

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