who receives the paperwork in return for money or other valuable consideration.

Assignment Fees

The money you receive for assigning a contract is called an assignment fee. The fee is negotiable between you, the assignor, and the person you assign the contract to, the assignee. The other party to the contract you have had accepted-seller, lessor, optionor, lender, or whomever-has no say in your negotiations with your assignee.

What should the fee be that you receive for assigning a contract? We have assigned a contract for as little as $1,000. We have also assigned a contract for as much as $100,000. Typically, the fees we have received for assigning contracts range between $5,000 and $15,000.

Types of Real Estate Contracts That You Can Assign

Virtually every type of real estate contract can be assigned. You can assign purchase contracts, options, leases, lease options, mortgage contracts, trust deeds, ...the list goes on. You can even assign an assignment contract! If it is a real estate contract, you can figure out a way to assign it. Assigning a contract is the easiest and quickest way to flip real estate.

Purchase Contracts

The complete name for a purchase contract is actually purchase contract for real estate and deposit receipt. This is the contract that contains the terms and conditions to which you and the seller agree when the seller accepts your offer to purchase their property.

We have included a blank purchase contract along with other useful contract forms in Appendix C. You can access the Texas Real Estate Commissions contract at www.trec.state.tx.us/. Office supply stores in your area may carry a generic real estate purchase contract. Or you can use a purchase contract from a local real estate company.

The truth of the matter is that you can use a napkin at a restaurant to write a real estate offer. We dont recommend using napkins to write your offers, however-the ink runs on the napkin when it gets wet. (Weve had it happen.) As long as the purchase contract is in writing, it is valid. Every state has a statute of frauds, which says that for a real estate contract to be valid, it must be in writing.

If you are working with a real estate agent and they want to use their contract, then use their contract. It is not worth the aggravation spending the time to educate a real estate agent on why you should use your contract. Just make sure everything you want in the contract is communicated by whatever purchase contract you use.

Youll want to include everything you can possibly think of in your purchase contract. Every blank space is either filled in, or the letters NA (not applicable) are written in. You are negotiating not just for yourself but also for the buyer to whom you are going to assign the contract.

Believe us when we tell you the new buyer wants a really good deal! How the new buyer gets a really good deal is when you write a really good contract that you have accepted from the property owner.

Your state may require special wording if you are purchasing a homeowners equity in pre-foreclosure. We have already mentioned the wording required by the State of California in the pre-foreclosure phase. Remember, the pre-foreclosure phase lasts until the foreclosure sale occurs, no matter what the state of the property is.

Deposit Receipt There is a deposit receipt section in every real estate purchase contract. Sometimes this is referred to as the earnest money deposit. This is where the buyer includes some type of valuable consideration with the contract to show good faith to the seller. In other words, the deposit the buyer attaches to the offer shows that he or she is earnest about buying the property.

We recommend using a promissory note as your deposit instrument for all your contracts for two reasons. First, by using a promissory note, you protect your cash. Second, you dont want 10, 15, or 20 personal checks out there accompanying all those offers you are writing and presenting.

You only have to turn the promissory note into cash if your offer is accepted and you are going to open an escrow. If you assign your purchase contract before you open escrow, then the promissory note never gets cashed.

The promissory note we recommend you use can be found in Appendix C. It is in the format of a check. You may be able to find a similar promissory note in the legal forms section of an office supply store.

This is a much simpler version than the promissory note used by lenders as evidence of the debt for a real estate loan. The main idea here is to have something attached to the purchase contract that represents consideration. This gives validity to your contract.

Option Contracts

A real estate option contract says you will buy a property within a certain time frame. You will commit funds in the form of an option fee or option money to keep the option open for the agreed-upon period of time.

Option contracts have a unique feature among all the different real estate contracts. All contracts are originally bilateral. Consent in the form of mutual agreement on both the sellers part and the buyers part is necessary for validity. Once the option has been agreed to, only the buyer can exercise it.

The seller cant back out of the deal if the buyer exercises the option. The optionee (buyer) can back out of the deal and not be sued for specific performance. The optionor (seller) gets to keep the option fee the optionee put up, but thats all.

We use an option contract that is designed to be assigned by the wording of the contract itself. See our book The New Path to Real Estate Wealth: Earning Without Owning for a copy of this option contract. In the event you are using an option contract that is not set up to be assigned, all you have to do is add the words and/or assigns to the buyers name portion of the contract.

Leases, Lease Options, Mortgage Contracts, and Trust Deeds

Every type of real estate contract can be assigned. Leases, lease options, mortgage contracts, and trust deeds can be assigned. Even an assignment contract can be assigned.

Car dealers use assignments in their rebate programs. Assigning contracts is everywhere in the business world. The point is that we want you to feel comfortable assigning real estate contracts.