HOW DO YO DO YOUR COOPERATIVE ASSIGNMENTS

[RICK430 0]

Hi everyone. I am new to this forum and it has been a pleasure dealing with Michael thru emails and reading his manual. I am an active investor, broker and certified appraiser. Somewhat experienced in Lease Options and now really interested in dealing with cooperative assignments exclusively. My question for those who actively do CA is how do you get a seller contracted?

 

In another words, when you find a seller do you have to sign a CA Lease, Option to Purchase and Assignee Agreement to act as a tenant/buyer yourself and then find and assign it to a third party? I personally would rather keep it simple and have one contract between myself and the seller dictating the services I would be providing for the seller and collecting a portion or all of the option fee for such services. Now mind you there may be issues of Licensing or having a real estate license to produce such a contract between myself and the seller but that would not be a problem for me since I already have a brokers license. This way one would not need to take on a tenant/buyers role and less liability. Does anyone here do this kind of cooperative assignment and if so what kind of contract do you use between you and the seller.

 

RICK

[luckydt 0]

well since almost 15 people have looked at this not said anything i will....the reason you are not getting any response is simply this if you have his manual and read threw it it has the contract that you use rigth in it so you shouldnt be asking what type of contract to be using if you read as stated in your post and most questions are answered in this forum use the search feature...sorry if that came off abrassive

[RICK430 0]

well since almost 15 people have looked at this not said anything i will....the reason you are not getting any response is simply this if you have his manual and read threw it it has the contract that you use rigth in it so you shouldnt be asking what type of contract to be using if you read as stated in your post and most questions are answered in this forum use the search feature...sorry if that came off abrassive

 

In the manual, it states to use 3 separate contracts the CA Lease, the OPtion Purchase and Ca Assignment Agreement, I have already confirmed with Michael. I merely want to know if anyone is using one contract to basically provide services to the seller in finding tenant/buyers and getting paid on the Option Fee without taking the role of a tenant/buyer and then re-assigning the contracts to a third tenant/buyer.

[Doug Pretorius (ON) 9]

I don't think there are any brokers on the forum who are doing a lot of CAs. I think Jonathan has done a few, perhaps he can enlighten you as to whether he did them as an investor or as a broker.

 

Here in Ontario you could set up a L/O for a seller acting as their broker pretty easily because these standard listing contract has check boxes for lease or sale.

 

You would still have to have the seller and T/B sign a lease and option. So I don't see how you would be making things any simpler. Basically you're doing "lease", "option" and "listing" instead of "lease", "option" and "assignment".

[MichaelC 160]

Rick, you are correct as to which contracts we use to complete a CA.

If I am reading you correctly, it sounds as if you want to provide a service to the seller, versus being a principal in the deal. I understand that you are a licensed Broker. But for most of us who aren't, I suspect this approach would land us in hot water with the local real estate commission. Too close to brokering without a license for my comfort. Which is precisely why we take the approach we do.

If you want to do your own variation on this, you certainly can and, being licensed as you are, you should be fine. My initial reaction is that the average homeowner will see themselves as paying you a commission for your services, which may cost you deals. One of the key selling points of the CA is that the homeowner is receiving top dollar and paying neither commissions nor closing costs.

[RICK430 0]

Rick, you are correct as to which contracts we use to complete a CA.

If I am reading you correctly, it sounds as if you want to provide a service to the seller, versus being a principal in the deal. I understand that you are a licensed Broker. But for most of us who aren't, I suspect this approach would land us in hot water with the local real estate commission. Too close to brokering without a license for my comfort. Which is precisely why we take the approach we do.

If you want to do your own variation on this, you certainly can and, being licensed as you are, you should be fine. My initial reaction is that the average homeowner will see themselves as paying you a commission for your services, which may cost you deals. One of the key selling points of the CA is that the homeowner is receiving top dollar and paying neither commissions nor closing costs.

 

Michael, I agree with you completely. I believe if we can make the deal quicker, simpler with less paperwork to the seller the better. As you said, since I am a licensed broker here then there would be no problem in drafting a 2 or 3 page contract indicating to the owner or landlord what my services will be, my fee and other terms and conditions instead of being in the middle with a lease, option contract and assignment agreement. Now to deviate this topic to out of state transactions where I or many others do not hold a real estate license I wonder if we can expand your consultation agreement to indicate that we would help the seller by consulting, marketing and advising to find a tenant/buyer. Once a tenant/buyer is found then there would be no need for assignment agreement, the Owner and Tenant/buyer will get into contract directly and we would just get paid for our consultation on the side again without being in the middle. Less liability, less paperwork, less hassle and headaches, don't you agree. Plus it would much simpler to explain to any seller that you are a lease/purchase specialist who would be a consultant in helping them find a tenant/buyer then explaining to them that you first need be the tenant/buyer first, with an option to purchase then you will assign it all to a third tenant/buyer.

 

Regarding your statement as to the seller seeing themselves as paying a commission to us that really should not be an issue since from the start the seller will know that our fee is paid directly out of the option fee from the tenant/buyer whatever that fee maybe once negotiated upon. I believe but not sure that if we expand on your consultation agreement to indicate specifically what our services will be with all fees, terms and conditions this would a more simpler and faster approach compared to Leasing, Optioning and Assigning. One will not have any interest hence there would be no interest to option, less legal hassle should anything go wrong between the owner and tenant/buyer down the road.

[Michael Quarles 1]

California Broker here... I think you are creating a larger issue having Agency relationship with both the seller and the buyer... Yes you could have the buyer sign that you don’t have agency but still seems like a lot more headache.

 

Imagine the time the seller didn’t disclose to the buyer something on the TDS or they failed to supply a lead base paint disclosure? you’re stuck right there with the seller defending your actions as an Agent/Broker and guess who is now able to interfere with your livelihood... DRE... The Department of Real Estate has ZERO jurisdictions in a dispute with you as a principal as long as agency didn’t occur... I would consider all of that first..

 

My Two Cents

 

Michael Quarles