We are seeing a big jump in assignment contracts. If you can get your hands on property right now, this is one way to make a deal in this hot market. I want to remind you of some items that your title company will need from you for a smooth transaction while working with an assignment contract.
If you are assigning the contract to another person or company, once that assignment has been finalized you are no longer a party to the escrow. If you want to continue to be kept in the loop or receive any documentation above and beyond your 1099-MIS forms, then the title company will need written permission from the parties to the contract.
If you are assigning your contract to another person or company, the title company will need to know how to handle any earnest money you currently have in the escrow account. You should have this direction in your assignment or nomination forms.
A few examples would be:
1. Your buyer has reimbursed you outside of escrow and you intend to assign your initial deposit to the buyer. The instruction should be clearly indicated in your assignment. The title company will need to have a third-party deposit form signed for their file so be prepared to sign this upon their request.
2. You expect to receive your initial deposit back at close. Your title company will need to see this direction in your assignment and will disclose the refund on the closing statement.
Remember your assignment contract is not only your contract between the assignor and assignee, but it is your instructions to your escrow company. Please be sure the instructions are clear and complete. Communication is key to making sure the closing is smooth and all parties remain happy.
Article provided by:
VP/Escrow Operations Manager
Chicago Title Arizona