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and or assigns

T

thecrow79

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I am currently in sign-back on an offer, but was told by the sellers that in order for the deal to go through I have to remove this term "and/or assigns". Since this is my first offer, I wanted to get everyones opinion on this. Is this something that is an absolute must on deals or a nice to have?

btw. I currently have a corporation and was planning on purchasing the property with my corporation.
Any help is greatly appreciated. Apart from this issue, the seller has also refused my 5 visits prior to closing, and allowed me only 1.

Thanks
Vik
 
QUOTE (thecrow79 @ Jun 18 2009, 04:44 PM)
I am currently in sign-back on an offer, but was told by the sellers that in order for the deal to go through I have to remove this term "and/or assigns". Since this is my first offer, I wanted to get everyones opinion on this. Is this something that is an absolute must on deals or a nice to have?



btw. I currently have a corporation and was planning on purchasing the property with my corporation.

Any help is greatly appreciated. Apart from this issue, the seller has also refused my 5 visits prior to closing, and allowed me only 1.



Thanks

Vik




What province are you in? If you are in BC it is already in the purchase contract in Clause 17.
 
QUOTE (thecrow79 @ Jun 18 2009, 07:44 PM) I currently have a corporation and was planning on purchasing the property with my corporation.
Any help is greatly appreciated. Apart from this issue, the seller has also refused my 5 visits prior to closing, and allowed me only 1.

Thanks
Vik

Have you confirmed you can get financing when it is purchased in a corporations name? Lenders much rather you have the offer in someone`s name.
5 visits!! 1-3 visits is the norm... But you will be able to visit the property during the inspection.
Will this be your primary residence?
 
You should confirm with your lawyer, but my understanding is that basically means you could potentially sell (assign) the contract to someone else. Remove that clause and you can`t. It`s up to you whether that is an important issue or not. By asking you to remove it, the seller wants to make sure that the transaction actually completes with you and that you won`t flip the contract before closing. If you`re planning to purchase the property with your company, is the company listed as the buyer in the contract?
 
QUOTE (thecrow79 @ Jun 18 2009, 05:44 PM)
I am currently in sign-back on an offer, but was told by the sellers that in order for the deal to go through I have to remove this term "and/or assigns". Since this is my first offer, I wanted to get everyones opinion on this. Is this something that is an absolute must on deals or a nice to have?



btw. I currently have a corporation and was planning on purchasing the property with my corporation.

Any help is greatly appreciated. Apart from this issue, the seller has also refused my 5 visits prior to closing, and allowed me only 1.



Thanks

Vik


seller and buyer have to agree .. you cannot enforce what you think is reasonable ..



perhaps an unmotivated seller !



If assign is important to you .. leave it in .. otherwise if the deal is really great consider sacrificing some unimportant issues on your end !
 
Where the heck is your REALTOR and team member in this?

I can`t infringe on your Agency contract. In my opinion, if it were me, I`d be putting those things right back in and try to find some balance and mutual agreement. Even if they can`t give 5, they should allow 3....or something like that. Find a common ground. You don`t need to disclose your motivation but if you feel it helps it`s because you`re creating a Corporation perhaps? Anyway, offers can`t be one-sided. If you can come to a price and it`s negotiating and give and take. I can`t say anymore than that because I`m an Agent. You really should be discussing this with him/her if they really want this to come together for you. Otherwise, it`s a business transaction so has to be in your best interest too.
 
Thank you everyone for your reply. What ended up happening was a quick call by my REA to the sellers to explain a few things cleared everything up.
 
Lenders will not allow and/or assigns. They need to know who they are lending the money to. You can start with that but it will have to be changed before the funder agrees to the deal.
 
Yep we have run into this too. And/or assigns is a BS term in AB and everyone (including the seller`s agent!) knows this.

Also makes the buyer look bad in my opinion if they don`t even know who is going to be buying the property. It also doesn`t really accomplish anything as it is very very easy to change the buyer or add other buyers once the contract is conditionally accepted - just tell the seller that in order to obtain financing this is who the buyer must be. If you tell the seller that you will be waiving conditions if they accept this change they will always say yes.

All the real estate investment books advise the inclusion of this term so that you can flip the contract and make a buck but I have personally never seen one done this way. One of the numerous `creative financing` techniques that sells books but is nearly impossible to actually pull off on a non-investor seller.



QUOTE (MikeMcCrae @ Jun 22 2009, 10:27 AM) Lenders will not allow and/or assigns. They need to know who they are lending the money to. You can start with that but it will have to be changed before the funder agrees to the deal.
 
Just to clarify...are you saying not to include the clause "and/or assignee" in the purchase contract and then when you find a buyer to assign the contract to then tell the seller that in order to remove the conditions the contract will have to be changed to show the buyer as (the person you assigned the deal to). Would this mean writing up a whole new contract so that the new purchaser you assigned the deal to can sign as the "buyer"?

What is the difference between "assignee" and "nominee"? I am not positive but I believe I was told that if you want to put a company or a JV partner on the contract later that you use "and/or nominee". Can anyone confirm this?


Debbie
 
I have always liked to have as few things to negotiate or explain to the seller as possible. A confused mind always says "no" afterall.



If you want to get into the business of assigning or flipping a contract then in my opinion you better have a VERY good idea who you are going to be flipping the deal to before you even write it. This is more for your stress than anyone elses.



What is common is for a REIN member to have a JV 99% locked up. The REIN member puts the deal in their name and then when the property is tied up they try and qualify themselves and the JV for the mortgage. If the REIN member cannot qualify with the JV then they amend their JV agreement to reflect the deal when only the JV is on the mortgage and change the purchase contract to show this. (amendment and waiver as described above). The seller will go for this every time if you say that the change in buyer on the contract is to obtain the best possible financing arrangement but that is an internal matter to the buyers and they will waive the financing condition if tyou, the seller, accept this amendment.



If you want to 'sell' the contract it is much tougher. the best way would be to do it the same way but I'd recommend you get some expert legal advice beforehand. I can smell these buyers a mile off... super low deposit, long condition dates and copy/pasted clauses right out of a US-based real estate investing book they picked up at chapters.



The legal difference between 'nominee' and 'assignee' would be a question for your lawyer but either one usually sends off the 'something fishy' vibe with the seller.






QUOTE (Debbie @ Jun 22 2009, 02:12 PM)
Just to clarify...are you saying not to include the clause "and/or assignee" in the purchase contract and then when you find a buyer to assign the contract to then tell the seller that in order to remove the conditions the contract will have to be changed to show the buyer as (the person you assigned the deal to). Would this mean writing up a whole new contract so that the new purchaser you assigned the deal to can sign as the "buyer"?



What is the difference between "assignee" and "nominee"? I am not positive but I believe I was told that if you want to put a company or a JV partner on the contract later that you use "and/or nominee". Can anyone confirm this?





Debbie
 
QUOTE (RedlineBrett @ Jun 22 2009, 01:50 PM)
Yep we have run into this too. And/or assigns is a BS term in AB and everyone (including the seller's agent!) knows this...


I'd strongly DISAGREE !!



We just bought a condo for our kids near UofA in Edmonton. I wrote the offer .. and it was unclear who would buy: a corporation, me, my wife, our daughter, our son, maybe 2 together ..



Also in our commercial multi-family deals we ALWAYS do this as we often open a new company to hold the asset that does not yet exist when we write the offer !



Yes, a bank has to know who is the buyer to get you a mortgage .. but a seller does NOT !



If you do JV contracts I also highly recommend you do this "and/or assignee" clause .. as you, or you and Mr. X or you and Mrs. Y or a new company ABC owned 50/50 by you and Mr. X or Mrs. Y may own it .. and that is often not known when you write the offer .. only when you waive conditions or when you close !
 
QUOTE (thomasbeyer2000 @ Jun 22 2009, 06:43 PM)
I'd strongly DISAGREE !!



We just bought a condo for our kids near UofA in Edmonton. I wrote the offer .. and it was unclear who would buy: a corporation, me, my wife, our daughter, our son, maybe 2 together ..



Also in our commercial multi-family deals we ALWAYS do this as we often open a new company to hold the asset that does not yet exist when we write the offer !



Yes, a bank has to know who is the buyer to get you a mortgage .. but a seller does NOT !



If you do JV contracts I also highly recommend you do this "and/or Assignee" clause .. as you and Mr. X or you and Mrs. Y or a new company ABC owned 50/50 by you and Mr. X or Mrs. Y may own it .. and that is often not known when you write the offer .. only when you waive conditions or when you close !




I agree with Thomas, you can do this in certain cases, if done properly and with a valid reason that your Mortgage Broker can satidfactorily describe to the lender. Here is a clause our now-retired lawyer had me insert for the purchase of a number of multi-family properties:

"The Seller acknowledges that the Buyer may choose to incorporate a corporation for the purposes of completing this transaction and acquiring title to the properties and if the Buyer chooses to do so, this agreement shall be deemed to have been amended to [insert the name of the corporation as Buyer here], the corporation shall be deemed to be the Buyer for all purposes relating to this agreement and the transaction contemplated herein and [insert buyer name here] shall have no liability or obligations whatsoever hereunder."
 
QUOTE (Debbie @ Jun 22 2009, 01:12 PM)
Just to clarify...are you saying not to include the clause "and/or assignee" in the purchase contract and then when you find a buyer to assign the contract to then tell the seller that in order to remove the conditions the contract will have to be changed to show the buyer as (the person you assigned the deal to). Would this mean writing up a whole new contract so that the new purchaser you assigned the deal to can sign as the "buyer"?



What is the difference between "assignee" and "nominee"? I am not positive but I believe I was told that if you want to put a company or a JV partner on the contract later that you use "and/or nominee". Can anyone confirm this?





Debbie




It can be there, most lenders wont' ask too many questions about it - though if you change the buyer to someone not on the contract, then the lender will require an addendum changing the buyer to the one applying for the mortgage - and removing the one who is not. You likely won't need a whole new contract.



If you can write the contract up in the actual buyers name in the first place, it simply removes that extrat step.
 
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