Are you interested in selling your Silicon Valley home? Have you developed a plan to qualify your buyers? Well, despite the slow down of real estate sales in some California markets, there are still plenty of real estate wholesalers looking to make money from flipping your contact.
So, how will you avoid these wholesalers? One way these wholesalers will be able to flip your home’s contract to another buyer is an Assignment Option. The assignment options offers the buyer to assign the option for the close of escrow to another buyer.
The assignment options are added to contracts to allow enough time for a wholesaler to market the contract to another buyers for a fee. These wholesalers collect anywhere from $5,000 to $30,000 depending on the list price of home that is listed for sale.
Most of these wholesalers will bring you a cash offer, but they will want to close the escrow within 30-45 days which is odd. After all no cash buyer needs that much time to close a cash deal. Even if their offer is contingent on an inspection, they should be able to close in 2 weeks or less if they are a real cash buyer. So, avoid these kind of offers or counter them to close in 2 weeks and watch then run.
assignment option might be added on the “buyer name” section or be part of an addendum to the purchase contract. For instance, the name of your buyer could be listed as “John Smith or Assignee”. And if an addendum is used to develop the assignment option, you might see language like this:
“seller agrees to cooperate with the assignment option of this contract to another buyer”.
So, if you are selling your own home (FSBO), one way to spot the wholesalers is the assignment option. According to National Association of Realtors, 28% of the homes sold by their owners were under-price which means as owners you might be starting your negotiations at a huge discount.
Contact Us if you need help with your Silicon Valley home sale.