By Maria Brandenburg and Janet Moe | Great American Title Agency, Inc.
Assignments of an Existing Purchase Contract (EPC) are a vehicle that many investors are utilizing to generate wealth.
To further explain, an assignment of a purchase agreement permits the initial buyer under a purchase contract to assign the purchase contract to the new buyer, a third party (Assignee). The assignment agreement allows the initial buyer to transfer rights and interest in the real estate property to another party (Assignee).
The Assignee, in writing, assumes all the obligations, terms, and conditions of the original buyer under the purchase contract. A critical element is a viable assignment agreement. Therefore, it would be wise to make sure that the initial purchase contract is specific with all the terms, conditions, and relevant details leading up to the close of escrow.
The Assignee may be purchasing the property using a hard money lender. Some hard money lenders may impose restrictions on the amount that they will lend and may not include the assignment fees as part of the total consideration of the acquisition of the property.
Most importantly, remember the following:
- Exercise due diligence and consult legal professionals.
- Always consider using an investor-friendly Title company.
- Caution and beware of who you partner with – Attorneys, Investors, Realtors, and Escrow Officers. It is also vital that you work with experienced individuals when doing assignment transactions. Many escrow officers are experienced and have been in the industry for many years, but some do not specialize in assignments. The liability may be great and the potential for loss as well.
Consider this: If you had a bad heart and needed heart surgery, would you seek out the most skilled knowledgeable surgeon, or would you go to a general surgeon? You would want the very best as your life is at stake. No less is needed when considering an Escrow Officer/Title Company, Attorney, Realtor, or Investor. Your success at investing is at risk. Many Escrow Officers/Title companies may attest to knowing how to facilitate an assignment real estate transaction and be knowledgeable in the investor arena, but you later discover, through the course of the transaction, that they are not.
Great American Title Agency, Inc. believes we have an obligation to share our good fortune with those who may be in need. Each day, we are confronted with the harsh reality that millions are suffering across the globe, our nation, our state, and our city. With that in mind, Great American Title believes it is our civic and moral responsibility to share our success with those less fortunate by supporting our local community throughout the Valley of the Sun.
In order to do this, we developed a unique program that we call The Great American Title Community Outreach Program. Per the customer’s request, we will donate 7.5% of the Escrow fee to an approved 501c3 non-profit charity on our list. For details on this, talk to Janet or Maria with Great American Title.