When the seller doesn't want to sign the assignment contract

Why sellers balk at assignment contracts

Sellers often balk at assignment contracts because they do not fully understand what the document means. He or she might view it as an unnecessary complication or suspect you are adding hidden fees. Distrust can arise if the concept is introduced without clear explanation, making him or her question your motives.

Another reason for reluctance is a general unfamiliarity with real estate investor processes. Most homeowners are used to traditional agent sales or direct buyer-seller transactions, so an assignment can seem outside his or her experience. He or she might believe he or she is signing away control of the sale.

Explaining the assignment vs. the deal

Focus on reassuring the seller that the core terms of your agreement remain unchanged, regardless of the assignment. Emphasize that the agreed-upon price, closing date, and property condition are fixed. The assignment is an internal mechanism for you to facilitate the transaction, not alter his or her outcome.

Explain that his or her responsibilities and benefits are exactly the same whether you close the deal directly or assign the contract to another cash buyer. The goal is to provide a quick, hassle-free cash sale, and the assignment helps achieve that efficiency without affecting him or her.

Offering a novation as an alternative

If the seller absolutely refuses an assignment, a novation agreement can be a viable alternative. With a novation, your original contract is replaced by a new one where your end buyer steps directly into your shoes. This means the seller will be contracting directly with the final buyer.

This method can give the seller peace of mind, as he or she sees himself or herself dealing directly with the party who will ultimately take ownership. Ensure your initial purchase agreement includes language that allows for novation, similar to how it would for an assignment. A novation removes you from the middle of the deal, replacing your contract with the end buyer's contract.

Considering a double close

A double close is another option that removes the assignment from the seller's view entirely. In this scenario, you first buy the property from the seller, and then immediately turn around and sell it to your end buyer. This involves two separate closings, typically back-to-back on the same day.

This approach requires more capital, as you need to fund the first transaction, even if only for a short period. Transactional funding or proof of funds for the first leg is often necessary. While more complex and involving double closing costs, it completely sidesteps any seller objection to an assignment contract.

Keep in mind that some title companies are more experienced with double closes than others. Confirm his or her familiarity and willingness to handle the two transactions simultaneously.

What if he or she still refuses?

After exhausting all reasonable alternatives, if a seller still strongly resists any form of assignment or creative structure, be prepared to walk away from the deal. Not every seller is a fit for every type of investor solution. Spending excessive time on a single, resistant seller can detract from other opportunities.

Sometimes, a seller's reluctance is a signal of deeper issues or mistrust that will likely surface again. It is better to move on to a new lead than to force a difficult deal. Focus your efforts where sellers are more receptive to your process. /how-to-work-your-leads

Habit: pre-empting the assignment question

Make it a habit to address the assignment process early and transparently in your conversations. Frame it as a standard part of how you operate to offer quick, cash solutions. Use simple, direct language to explain why it's beneficial for him or her.

For example, you might say, 'We work with a network of cash buyers, and sometimes we'll assign our contract to one of them, but that doesn't change anything for you. You still get the agreed-upon cash price on your chosen closing date.' This proactive approach helps build trust and minimizes surprises. /learn/first-call-with-a-motivated-seller