Q & A Saturday – What is Assigning the Contract?

Welcome to our Q & A Saturday video.

In these Q & A Videos we will answer your questions about real estate.  Any real estate related topic from questions about selling your house, buying a house, real estate investor questions, land lording questions, local market questions and many others things are all fair game. 

Today’s question is “What is Assigning the Contract?

Assignment Contract - Massachusetts and New Hampshire Real Estate

In this video Shaun discusses assigning a contract when wholesaling a house.

 

Some of the main points covered in this video are:

1)      What is real estate Wholesaling 

2)      Different ways to Wholesale a property

3)      When you can’t assign a contract

4)      Issues a wholesaler needs to avoid when marketing a contract

5)      When you are acting as an unlicensed real estate agent

 

Wholesaling real estate is a very popular entry point to the investing world that is hyped up by a lot of real estate educators and gurus as it is a pretty simple concept and can be much less cash intensive than other strategies.  Case in point is that one generally needs very little money to assign a contract (outside of the marketing costs to find the deal, but that is a different topic…).  Contract assignments are governed more by contract law than real estate law so it is important to understand that one is selling their rights to a contract secured by real estate and NOT selling that piece of real estate (unless you are in fact buying it as in a double closing situation).  Massachusetts has not really tried to crack down on any wholesaler issues but it is happening in some other states so it is important to keep things correct and follow the correct formalities to avoid acting as an unlicensed real estate agent.

 

Hope you enjoyed the video and leave any other questions you have about the topic below or any other topics you would like to see covered in future videos.  I encourage anyone that has things they would like to talk about to let me know what they are.  You can always fill out a contact us form here and put Q & A in the subject, just leave a comment with your questions below here, send an email to info@masshomesale.com, or post it on our Facebook page or Twitter account.

 

Resources mentioned in the video and some other useful resources and good articles:

–          Our Previous Video on What Is Real Estate Wholesaling?”  

–          NOLO article defining and explaining contract assignment.

 

 

 

 

 

(Image Credit: Assignment Contract via Goodman Realtors)

 

Comments

  1. Is the assignment contract you use specific to MA or can it be used anywhere in the US? I am trying to wholesale deals nationwide but I’m just not sure which contract to use.

  2. Hi David,

    Thanks for reading/watching and commenting.

    In general there are 3 ways people try to wholesale with assigning a contract.
    1) They use the standard state contracts. If a contract doesn’t specifically prohibit assignments (such as you see in bank contracts for their REO properties) you should be able to assign it. You can always add the “and/or assigns” language too if you want to be safe.
    2) They have a contract drafted by an attorney in the state it will be used to make sure it conforms to all the nuances of the state law while also making sure to give you the best protection.
    3) Use a generic Wholesale contract. Usually something from a course sold via some national guru. These MIGHT be fine or they might not be totally valid in any given state.

    In my opinion if your state contracts are simple enough they are fine to use. If they are some 20 page behemoth they might be a pain to use unless the sellers have done a lot of transactions before and know them pretty well.
    Having your own contract drafted by a trusted attorney is always a good bet and should not cost more than a few hundred bucks.
    If you have a generic one that you have reviewed and has everything you would want in it you can just have it reviewed by an attorney in any state you will be working in. They can make any tweaks that may be needed so you can feel more confident there won’t be any issues. This SHOULD also be a bit cheaper than having them draft one, unless they do major editing.

    Good Luck!

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