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Different Ways to Close a Deal

By: Ben Needles

There are many ways to close a deal. You probably wont use all of these but its good to know the ways so you dont miss a deal when it comes along.

Assignment of Contract: The first and easiest way is an assignment. You wont be able to do an assignment on every deal. Some sellers, especially banks or lenders and most realtors, wont allow you to put an assignment clause in the contract. An assignment is where you dont buy and sell the property. You assign your existing contract to another person whos stepping into your shoes and completing the contract. The person you assign the contract to abides by the terms you have negotiated.

Assignment of Beneficial Interest: This is a way to assign a non-assignable contract. If cant assign the contract, you can create a trust with you as the beneficiary and then assign the beneficial interest in the trust. The name stays the same on the contract and doesnt change but you have to list the buyer in the contract as the trust.

Subject To: This is where you buy a property with the existing financing in place and continue making payments on the sellers mortgage. The reason Im not a big fan is that anyone can get a property subject to by simply talking the seller into deeding the property to you and you continue the payments. Ive seen many new investors who focused on getting the deed and either couldnt sell the property or couldnt find a tenant and had to give the property back. Many states have enacted laws to protect consumers against investors who buy a property subject to. Check your states local laws regarding this option.

Options: In an option you dont have a contract on the property but an option to buy the property at a certain price and for a certain length of time. The money you give the seller as option money is non-refundable as its the price you are paying for the option itself. You then decide if you want to exercise the option or not. If you dont have your option sold to a buyer wholl actually close the deal then you simply let the option expire. In this type of transaction you wont need any more cash than the price of the option just remember the option money is non-refundable.

Youll be limited to the amount of sellers you can use an option with. Most realtors dont want to submit options as they want an actual contract on the property and dont want to take the property off the market during the option period. The best types of sellers to use an option with are for sale by owners.

Simultaneous Closing: This is having two closings back to back but your buyer will fund your purchase. Youre closing in your name but you dont have to bring any funds to the closing. Not every attorney or title company will allow you to do a simultaneous closing. Youll just have to ask your attorney or title company if they do these types of transactions. Many problems that arise come from this type of transaction. If you dont have your own funds to close and something happens to your buyer then you cant close and your seller will be upset, maybe to the point of suing you for specific performance.

Physically Closing: This is when you actually buy and fund the property with cash or financing. With this method you need to have your funding lined up in advance so you can close regardless of what happens to your buyer.

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About the Author (text)

For more articles and a 10 part e-course on how to create your own Ultimate Buying and Selling Machine! plus over 50 training audios, simply go to www.LarryGoinsFreeOffer.com where you will gain instant access!

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