Working with real estate agents on assignment deals

This is something we have been doing more of lately because we’re listing on the MLS for dispositions and we had to dial in our process this week because we kept making it up with each new transaction. Shout out to my son Jasper Cool for helping us by sharing his process.

So how do we work with agents?

Let them know it’s an assignment of contract- Ask them if they have experience with this.
1. If they don’t have experience with it, you will have to educate them and walk them through the process.
Request that you use your own contracts. Or better yet, tell them that you plan to use your contracts and your lawyer because they know how to do assignments and your contract works.
Most real estate agents will push back on this because their brokerage will not allow them to use anything but the standard real estate commission contract.
If you have to do this and you don’t see another way around it, ask to still use your closing attorney.
1. If they insist on using their closing attorney, you must confirm that that attorney does assignments of contract and has done them before. For us, this can be a deal breaker. We do not want to work with attorneys who do not like wholesalers. Do not want to do assignments or don’t know how to do them. It’s a place we draw a line in the sand.
2. If you cannot change the attorney and the attorney does not do assignments of contract, then you will have to do an AB/BC closing, which means you’ll have to buy the property and then sell it to the buyer. This will cost you extra in closing feesand you will need to have the cash to purchase the property.

Getting the contract signed when using the real estate commission contract. The Logistics:

1. 1. You will sign as the seller.
  2. You will check the box on the real estate contract that says “seller does not own the property yet”.
  3. You will inform the real estate agent that the seller will sign all of the closing documents.
  4. You will create an assignment addendum, which the Real Estate Agent’s buyer will sign. It basically states that the buyer is taking over your contract in order to purchase and they are taking over the terms that you agreed to with the seller. Also that you’ll be paid an assignment fee at closing from the buyers funds.
    1. The agent and or the buyer may request a copy of your contract. This is understandable since they are agreeing to terms that they haven’t seen.
    2. You can provide a full copy. You can also redact your financial information if you want to but they will see it at closing anyway.

Even if the buyer insists on using their attorney, I recommend having your own attorney do the seller side documents

1. This ensures that you have some control over the process and also your attorney will know how to do assignments and can coach the other attorney and the agent if necessary.
2. You will be paying closing costs anyway with a real estate agent because they will split closing costs traditionally. You can put in your agreement with the seller that the buyer pays all closing costs, but we experienced that the buyer will often push back or the agent will push back on this. It can be negotiated of course, but you don’t want to make it a deal breaker. Most agents don’t understand the non-traditional split of closing costs in my experience.
Once everything is signed then the real estate agent will get it to the closing attorney and you will get documents to your attorney and inform them that you want them to do the seller side on the closing. Give your attorneys compact information to the buyer’s real estate agent.

And that is how we’re handling working with real estate agents now. Let me know if you have any questions or also any suggestions if you’re doing this on a regular basis. Leave a note in the comments.

If you like this post you might also like this one: Flat Fee MLS for Wholesaling- Get More Attention, Sell More Deals!

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Mark Cool

Working with real estate agents on assignment deals – How do you do it?