Recently I have represented clients who did not list/ market their property with a realtor but were contacted directly by buyers who claim they will buy the property with no mortgage and inspection contingencies and close within 30 days.
What generally occurs is that the Buyer gives them a very basic Contract and almost always wants the right to assign the Contract to someone else and be able to market and advertise the sale of the property to others while you still own the property.
What this means is that the Buyer is just holding the property under contract until they can find a buyer to assign it to right before closing and make a profit of anywhere from $20,000.00 to $50,000.00 and sometimes more. The person they assign it to is the ultimate buyer. What tends to happen is they do not want to put down more than $1,000.00 deposit or sometimes no deposit, which is a red flag as they have no skin in the game and many times they are amateur investors who cannot find an end buyer and really do not have the funds to Purchase the property themselves. In many cases they end up having to cancel the transaction and waste everyone’s time. In addition, many title companies will not insure these types of transactions unless the buyer discloses to the Seller the fact they are assigning the Contract and the amount of profit they are earning. Many of these wholesale buyers do not want to disclose this and many times Sellers are not happy to find out that they could have sold the property for much more had they had a Realtor and/or an Attorney involved from the beginning.
With my recent transactions each Seller went through at least 2 of these types of Contracts before either finding a real buyer or listing the property with realtor who can vet out the buyer prior to entering a contract. In every transaction Its important to have an Attorney review any Contract you sign, especially when there is no Realtor prepared Contract involved. No one else can give you legal advice except for licensed Attorneys and your Attorney can prepare their own contract or review and amend any Contract prepared by the Buyer or their Attorney. Many times when an Attorney reviews or prepares the Contract they find the true intention of the Buyer and the Seller can decide if they want to take the risk or move on to someone else. While we always recommend Selling your property with the assistance of a licensed Realtor we can assist in for Sale by Owner transactions by preparing the Contract and looking out for your best interest from Contract to closing. Give us a call for this situation or any real estate transaction.
The information in this blog posting is for general information purposes only. Nothing in this blog or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information in this blog is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.