This is the continuation of an article detailing the difference between a double escrow and an assignment.
How Do You Do An Assignment?
An assignment is literally a one-page document that is assigning the seller to the buyer. What does assignment mean? Assignment means to sell. You’re selling your contract. Picture that you’re selling your contract for a price. You’re going to sell that contract to the buyer for $5,000. Now what’s going to happen is the buyer is going to wire in $50,000, and he’s going to buy the property directly from the seller. He’s going to wire in probably $55,000 plus closing costs. $5,000 will go to you for the assignment. The balance will go to the seller, and the guy will own the house.
Why Shouldn’t You Do An Assignment Over $5,000?
Like I said, you wouldn’t do an assignment on an $18,000 deal because now the buyer is going to see you potentially making $18,000 on the deal. He’s going to balk and try to re-negotiate.
I never sign an assignment contract right on the front with the buyer. I always get him to sign a purchase contract. I get $2,500 non-refundable. Then, if I decide to do an assignment thereafter, I’ll do an assignment thereafter.
I always want to negotiate price, but I never want to negotiate my assignment fee. I structure mine to where I’m negotiating the price of the house because I can make a valid argument. He never knows what I’m in it for. He has no clue what I’m in it for.
What happens is I turn around and now negotiate the price. I get a contract and non-refundable funds. Let’s say in this example, I sell it for $55,000. I’ll go back to the buyer and say, “Listen, we’re just going to do an assignment because I’m pretty tight on this deal.” He goes, “Okay, fine, we’ll have the title company prepare the assignment and get that at close of escrow.”
He’s going to see the assignment on there for $5,000. He can’t re-negotiate and balk at that. He might try, but you’re going to say, “We have two different options. We can close it today or you can renege and not close it today, Mr. Buyer. I’ll keep your $2,500 and sell it to someone else for more, making more money. What would you like to do?”
Again, alternative choice close—take control of the situation. Here’s how it is done. You’re not messing around. Business is business. If he wants to start trying to renegotiate your fee, forget about it.
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