Finding a great real estate deal can be time-consuming. But if you’ve successfully surpassed this obstacle, then sit down with the seller to explain your intent and put the house under contract. At this point, you can make your offer to the seller, but you need to explain your intent to them. This will help the seller clearly understand your plan and how you will pay them.
It is important to do so for all the right reasons. Real estate wholesaling is a unique concept. It is a very different type of transaction as compared to purchasing a property outright. Therefore, it makes sense to provide a clear explanation to the seller before the contract is signed.
That way, there will be no confusion. Also, once you clarify your intent, then you can contract the property by signing the ‘Wholesale Purchase Agreement’.
Wholesale Purchase Agreement—What Is It?
This document is primarily to put a wholesale house under contract. It outlines all the terms of the agreement between the home seller and the wholesaler. It includes details such as:
- Property information
- Seller and buyer information
- Important dates
- The assignment clause
The assignment clause is critical. This is what helps the wholesaler assign the ‘Purchase Agreement’ to another investor—the actual property buyer. In other words, it gives the wholesaler the authority to transfer the right to purchase the property to another party. So, the wholesaler actually completes the deal without owning the property or investing in it.
The next step to putting a wholesale house under contract is to find qualified buyers. Qualified buyers have funds readily available to make a purchase. Upon finding a buyer interested in making the purchase, the wholesaler assigns/sells the Purchase Agreement to them. This is done with a simple and one-page document known as an Assignment Agreement.
Understanding the Assignment Agreement for Real Estate Wholesaling
The Assignment Agreement is basically a document that allows the wholesaler to assign the contract to the buyer. It legally transfers all of the wholesaler rights to the actual buyer. Furthermore, it also releases the wholesaler from any kind of liability or obligation pertaining to the property sale. It does this by substituting the Assignee/actual buyer in their place.
This document transfers all rights legally to the actual buyer such as the right to purchase. It is critical for this agreement to have clear timelines so that they mesh with the Purchase and Sale Agreement.
Read up on the Assignment Agreement to develop a strong understanding of the document and get complete know-how on how it works.
So, if you want to earn through real estate wholesaling, make sure to be clear about your intent to the seller. This will allow you to put a wholesale house under contract with the right terms. With the right terms in place, you can ensure there are no legal issues and the deal is closed successfully.