How to Put a House Under an Assignment of Contract

If you wish to put a home under an assignment of contract, there are a number of steps that must be followed to do so correctly. Putting a home under an assignment of contract allows the buyer to assign the home-purchasing contract to another person for an assignment fee, or a fee paid for finding and selling the contract in question. Assignment fees are paid to a buyer in anticipation of a larger profit margin that already exists in the property.

Instructions

1. Find a piece of property you believe is currently below market value and come to terms on an agreement in price with the seller. Choose a piece of property that you believe, after all necessary repairs or upgrades, will be worth significantly more than what you paid for it and would spend in expenses to fix it up.

2. Instruct the real estate agent to include an assignment of contract clause in the closing contract. To do so, simply put "And/Or Assigns" after your name at the bottom of the contract and include space for the assignment fee to be included. While most contracts will have the language already built in, some will not. This ensures that you can assign the contract to another individual once the sale is complete. In this case, it is best to consult a lawyer to ensure that the transaction goes smoothly.

3. Find someone who recognizes the profit potential you originally saw in the property and assign them the housing contract once all terms are agreed upon. When assigning a property, the owner of the contract and the new seller agree to an assignment fee -- to be paid by the seller to the owner -- that is usually around 15 to 20 percent of the potential profit. The seller realizes the potential profit and is willing to pay a certain percentage of it in advance in anticipation of future earnings.

4. Assign the contract to the new owner, once you have agreed to payment terms, by signing the original document by the "And/Or Assigns" line and indicating the assignment fee in the corresponding box on the contract. The new owner will be required to sign on the line as well.

References

• "Real Estate Law"; Raymond Werner; 2001