I guess I have explained for 15 years to anyone who would listen about the assignability of a contract. My statement has been very simple, "If a contract does not specify it is not assignable, it is assignable." I have claimed that this applies to any legal and binding contract – not just real estate contracts.

This concept was further supported by a Youtube video I saw where the AG of Ohio was interviewed about the legality of investors selling properties without being licensed. When she was asked about assignability she said almost the identical words I used. But let's get to the real everyday world of dealing with this issue.

Let's first talk about why it even matters. There are three types of real estate contract assignment. In this case the investor "B" would be the Assignor and the "C" buyer would be the Assignee.

1. Buyer may assign the contract but not be held liable for what the Assignee does or doesn't do with regard to the terms of the contract.

2. Buyer may assign the contract but he will be held liable for what the Assignee does or doesn't do with regard to the terms of the contract.

3. Contract may not be assigned…

When an investor deals with a seller directly, the issue of assignability seldom, if ever, comes up. However, when dealing with listing agents, it comes up the vast majority of the time. It is my belief that listing agents believe that if a contract is assignable the chances of closing are greatly diminished so they immediately check the "may not assign" option on the contract.

In reality, if the buyer was allowed to assign the contract it is far more likely that the property would be resold to another investor or rehabber and everyone would be paid. More often than not, the fact is the buyer can't resell the property in time with any profit so he defaults on the contract which results in everyone losing.

We have had feedback from agents, brokers and attorneys who say this thesis of assignability that I set forth is hog wash, it invalidates the contract if no option is checked and various dastardly things will happen to the investor buyer if the contract doesn't stipulate whether the contract is assignable.

I was with my attorney yesterday and he very excitedly brought up this exact subject because he went to the extent to search the Florida Statutes to determine if in fact this statement was urban legion, hearsay or simply a fabricated statement.change your life mentoring click button j 300x236 1

He found that in an appeal to the Florida State Supreme Court, the Court's opinion was "In general, contracts are assignable unless forbidden by the terms of the contract, or unless the assignment would violate some rule of public policy or statute, or unless the terms of the contract are such as to show reliance on the personal credit of the purchaser."

What was even more interesting with this case was the result of an investor trying to add and use the term "and, or assigns" into the purchase contract and the Court went on to invalidate the contract for this reason. Remember this when Guru's are telling you just to use these words to make your contract assignable. When this doesn't work is when you need it the most and most of the time it may not matter but what if it happens and you lose the deal and attorney's fees besides?

What is much more powerful and legal is to use language in the Addenda Section of your contract that stipulates your ability to use the end-buyers funds to fund your deal at closing. This statement will likely create a firestorm of comments but just remember whatever your feeling is about this; it is being done nationwide legally thousands of times a month.

Remember, the above information is for educational purposes only and not intended as legal advice, always consult the advice of an attorney when doing contracts in real estate. When someone tells you it can't be done ask them how they know that and if you could see the Statute that says that. Then have your attorney check what the Supreme Court in your State ruled rather than assuming an archaic Statute is still legal and binding and that people run around quoting. As to why closing agents won't cooperate on complicated closings it is more often the title insurer or the closing agent's comfort level rather than a specific law or regulation.

Just be careful out there….

I wish you limitless success,
Dave Dinkel

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.

I guess I have explained for 15 years to anyone who would listen about the assignability of a contract. My statement has been very simple, "If a contract does not specify it is not assignable, it is assignable." I have claimed that this applies to any legal and binding contract – not just real estate contracts.

This concept was further supported by a Youtube video I saw where the AG of Ohio was interviewed about the legality of investors selling properties without being licensed. When she was asked about assignability she said almost the identical words I used. But let's get to the real everyday world of dealing with this issue.

Let's first talk about why it even matters. There are three types of real estate contract assignment. In this case the investor "B" would be the Assignor and the "C" buyer would be the Assignee.

1. Buyer may assign the contract but not be held liable for what the Assignee does or doesn't do with regard to the terms of the contract.

2. Buyer may assign the contract but he will be held liable for what the Assignee does or doesn't do with regard to the terms of the contract.

3. Contract may not be assigned…

When an investor deals with a seller directly, the issue of assignability seldom, if ever, comes up. However, when dealing with listing agents, it comes up the vast majority of the time. It is my belief that listing agents believe that if a contract is assignable the chances of closing are greatly diminished so they immediately check the "may not assign" option on the contract.

In reality, if the buyer was allowed to assign the contract it is far more likely that the property would be resold to another investor or rehabber and everyone would be paid. More often than not, the fact is the buyer can't resell the property in time with any profit so he defaults on the contract which results in everyone losing.

We have had feedback from agents, brokers and attorneys who say this thesis of assignability that I set forth is hog wash, it invalidates the contract if no option is checked and various dastardly things will happen to the investor buyer if the contract doesn't stipulate whether the contract is assignable.

I was with my attorney yesterday and he very excitedly brought up this exact subject because he went to the extent to search the Florida Statutes to determine if in fact this statement was urban legion, hearsay or simply a fabricated statement.change your life mentoring click button j 300x236 1

He found that in an appeal to the Florida State Supreme Court, the Court's opinion was "In general, contracts are assignable unless forbidden by the terms of the contract, or unless the assignment would violate some rule of public policy or statute, or unless the terms of the contract are such as to show reliance on the personal credit of the purchaser."

What was even more interesting with this case was the result of an investor trying to add and use the term "and, or assigns" into the purchase contract and the Court went on to invalidate the contract for this reason. Remember this when Guru's are telling you just to use these words to make your contract assignable. When this doesn't work is when you need it the most and most of the time it may not matter but what if it happens and you lose the deal and attorney's fees besides?

What is much more powerful and legal is to use language in the Addenda Section of your contract that stipulates your ability to use the end-buyers funds to fund your deal at closing. This statement will likely create a firestorm of comments but just remember whatever your feeling is about this; it is being done nationwide legally thousands of times a month.

Remember, the above information is for educational purposes only and not intended as legal advice, always consult the advice of an attorney when doing contracts in real estate. When someone tells you it can't be done ask them how they know that and if you could see the Statute that says that. Then have your attorney check what the Supreme Court in your State ruled rather than assuming an archaic Statute is still legal and binding and that people run around quoting. As to why closing agents won't cooperate on complicated closings it is more often the title insurer or the closing agent's comfort level rather than a specific law or regulation.

Just be careful out there….

I wish you limitless success,
Dave Dinkel

Frequently Asked Questions

1. What Should I Do If a Seller Ghosts Me?

If you feel you have been ghosted, act decisively and quickly. If you have tried texting and calling, it's time to drive by the seller's location. I always take the recorded Notice of Interest or Memorandum of Contract to leave, so the seller knows it exists. Go by at a time when you know they will be there and don't be confrontational, just get the facts.

In our experience with new investors, the chances of losing a deal with no contract is likely over 85%. Verbal commitments do not apply in contract law; get everything in writing, especially contract changes.

Different 'gurus' have different opinions, but our experience is finding motivated sellers and then a buyer for your deal. Ideally, you should be finding motivated buyers from day one, so you are ready when you find a seller. Buyers are easier to find as you can see at https://davedinkel.com/products/

Prevention only comes about by thinking a Black Hat wholesaler will be coming after your deal. First, educate the seller that an unscrupulous investor may come by and illegally offer more money, have the seller sign your "Notice to Homeowner," stating that he understands he cannot accept another offer.

There is nothing illegal about changing their mind, it is called seller remorse and occurs about 25% of the time. However, if they have signed your contract, it can't be cancelled for any reason unless acceptable to the investor/buyer.

If price is an objection, you need to find out how important it is to sell fast and for cash. If the seller isn't under a time constraint, has a money issue, or has a personal dilemma, he may not agree to the price you need. Offer to help move and build it into your price before you make your offer. However, never give the seller money; only pay the moving company, and only after closing (escrow with a closing agent). If fear is the seller's issue, break it down into what the real problem is and answer their objections one at a time.

You can get to the root of motivation for a seller by asking a few questions. First, "Why are you selling?", "How soon can you close?", and Are you ready to sign an AGREEMENT today, if not, what do I have to do to make you comfortable?'. The answers to these questions will determine the truth about your seller's motivations.

The best times to involve your attorney in your deals are to have him review your contracting, review the signed contracts from the seller and end buyer, have him open escrow and start the title work, negotiate with city or counties for lien reductions or mortgage payoffs with lenders, and to close the transactions." Your attorney is not the adversary; it's the opposing party's attorney who is a deal killer, and having your attorney allows him to help overcome this obstacle.

The key to successful prospecting and bringing back deals that didn't close is to follow up until the property is transferred in the public record. Some of our deals have been where the seller came back to us months and years later because they felt comfortable with us and not the other "pushy" investors who contacted them.

Your contract's most important clauses are inspection period (as long as possible), when the EMD must be deposited if at all, your ability to access the property, any added clauses specific to the property that will protect you against seller claims later that were verbal only.

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.