Assignment
What assignment means for you
We often intend to assign the purchase contract to another buyer before closing. That is a normal way for investors to operate, and it is also the part of this business most often explained badly.
What actually happens
You sign a purchase agreement with us at an agreed price. Before closing, we may transfer our rights under that agreement to another buyer, who then closes on the same terms.
The price you agreed does not change because of the assignment. What changes is who signs at the closing table.
What does not change
Your sale price, the closing date you agreed, the contingencies in the contract, and your right to walk away if the terms are not met. The buyer stepping in takes the contract as it is written, not a rewritten version.
What we disclose
In writing, before you sign: that we may assign the contract, and the assignment fee we expect to earn. If that fee is not disclosed, do not sign. with us or with anyone else.
Why investors assign at all
Assigning spreads the risk. The first buyer takes the risk of tying up the property while the work is scoped and a final buyer is found; the second buyer takes the property. Neither is free, which is why the price sits between what a seller in difficulty would accept and what a repaired house sells for.
None of that is a reason to accept a bad contract. It is a reason to read the assignment clause, the fee, and the contingency dates before you sign one.
Three things to check in any contract
- A written statement that assignment is permitted
- The assignment fee, disclosed in the agreement
- An inspection contingency that protects you if the property is worse than described
Common questions
Does assignment reduce what I get paid?
No. Your price is fixed in the contract. The assignment fee comes out of the buyer's side of the transaction, not your proceeds.
Can I refuse an assignment?
The contract either permits assignment or it does not. If it does not, we cannot assign it. If it does and you would rather it did not, that is a negotiation before signing, not after.
What if the buyer who takes over cannot close?
Then the contract is still ours, and the obligation to close on the agreed terms remains ours, subject to its contingencies. An assignment does not let us walk away from the agreement.
Where is the assignment fee shown?
In the purchase agreement or an addendum, in writing, before you sign. If it is not there, ask for it in writing or do not sign, that applies to any buyer, not only to us.
Related
Next step
Tell us the address and what is going on with it. We will look at the property and put a number in writing. Sending a message creates no obligation, and we will say plainly if we are not the right buyer for it.