Contract Assignment Question

**bashirqaasim** · 03-25-2007, 07:55 PM

Hello,

I am a full time student at DePaul, broke, and extremely new to Real Estate. Despite of this I am very ambitious and ready to do my first contract assignment. I just acquired a list of extremely motivated sellers in my area and will start making offers this week. There is one thing I am worried about though. What happens if I write up a contract to buy, find a new buyer, but then the new buyer walks after my walk period is up? What legal action can be taken against me if I am still under contract to buy, cannot find a buyer by the closing date, and cannot pay? Any advice on how to further protect myself would be greatly appreciated.

Thank You,

Bashir

**JChristin** · 03-26-2007, 11:38 PM

I would suggest having several backup plans in place prior to jumping into the hot skillet. If you haven't an avenue in which to gain funding from outside sources, perhaps you haven't performed your homework well. The other party(ies) could have legal recourse. Seek the advice of a Real Estate Attorney.

Otherwise, pray.

Good luck!

**Alpharetta** · 04-04-2007, 06:27 AM

How has this worked out for you?

**waynelong** · 04-04-2007, 07:45 AM

The truth is that it is very hard to make a buyer - especially with no means - buy if he doesn't want to. You will probably lose your earnest money but if you make the second buyer put that up -you really are risking very little. It is true the seller can sue you for not closing but most people are not going to waste money going after someone who has no money. I am not an attorney and would recommend that you consult one for legal advice. I am just giving you real world truth. Wayne

**Codythebest** · 04-07-2007, 05:44 AM

Maybe by making your buyer well approved.
Let's say this:
You find a property worth $100K and you control it at $75K.
You put $1k earnest money in escrow.
You want to assign the contract for $10K.
make sure your buyer has been pre-approved (not pre-qualified) and assign the contract with 10% down in escrow ($7.5K). If he runs away, too bad. He lose the 10% except if inspection contingency ( you'll have the same in your contract anyway) and/or mortgage contingency (few chance to happen if pre-approved - and you have the same contingency anyway). You may add other contengencies as well like "contingent upon partner (your buyer) eligible for financing and inspection acceptable for both partners)
He doesn't run away, you make ten grands...

**JChristin** · 04-07-2007, 12:06 PM

A word of advice regarding property flipping:

Review your state statues concerning what constitutes conducting professional real estate activities without the benefit of a real estate license.

You could be walking a fine line in your local jurisdicition. Be aware.