Process
Assignment of Contract
Transferring the rights of a purchase contract from the original buyer (wholesaler) to a new buyer (end investor).
Definition
An assignment of contract is a legal document that transfers the rights and obligations of a real estate purchase contract from the original buyer to a new buyer. In wholesaling, the wholesaler assigns their contract to a cash buyer for a fee. The original contract must explicitly allow assignment, and the assignment fee is paid at closing. Assignments are legal in Maryland when properly disclosed and papered.
Example
Original contract: Wholesaler buys from Seller for $85K. Assignment: Wholesaler transfers contract to Cash Buyer for $95K. Closing: Cash Buyer pays Seller $85K + Wholesaler $10K.
Related terms
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