Quick question. Today, I had a flipper come into my office and write several offers on different properties with "and/or assigns". My question is, do REOs in California even accept those offers? Has anyone had much luck putting them in escrow? Just wondering if I wasted a couple of hours and a bunch of paper.

I have never done it with a bank, but I find it highly unlikely they will let that go through.

Done them lots of times. Very common w/investors, escrow will request they clarify how they want to take title once it's open.

Investors who work w/various associates do this all the time & eventually figure out the best way to structure the deal & hold title.

Thanks for the reply, DR. The buyers told me they run a company with a pool of investors as clients. They find the properties, offer below market on REOs and then when they get an accepted offer, they take bids from their pool of investors and pocket the margin while assigning the property to winning bidder.

If none of the investors want the property, then they trigger a contingency clause and back out. Not sure I like that, only a matter of time before listing agents will not be happy to see an offer from me. That could hurt future clients.

On the other hand, if these guys are getting offers accepted, and closing escrows, then I'll feel much better about helping them (and I'll have an excellent source of income in this crazy market).

So far I'd had feedback from one broker who told me "don't worry, the banks are use to seeing offers like this. It's par for the course in this market". If all the other brokers have the same attitude, then I'll bring more deals to these investors.....

Sounds right to me. Our standard contract has a 17 day contingency & yes investors know about it & yes they do use it at times.

It can generate some bad feelings btwn agents but it happens & listing agent has the option of keeping seller's options open. When I get an offer like this for a private party seller these days I often will keep the listing on *active-contingent* status & let the other agent know it will stay there until inspection & financing contingencies come off. Financing can be tough for investors to get so it makes sense not to take the property off the market too early & if the buyer wants it that does seem to light a bit of a fire under them.

I'm not a fan of passive removal either esp w/investors, btw.

Jeff get ready to shotgun a bunch of offers waiting for one ot be accepted.The investors like this because they put no money into the deal unless the low-ball offer is accepted.They know at the price they are offering if it is accepted they can assign it for a fee.

Banks used to say kiss off to the and or assigns clause but with there reo books and pre-foreclosures piling up they will look at anything for the next year until inventory goes down and all the markets reset.

Sometimes there will be title transfer issues in these types of deals with a double or simultaneous closing.

good luck

Maybe you should ask your flipper 'buyer' to provide some sort of documentation that he or someone in his network actually has the capability to buy the property???

If he's just "bird dogging" properties for other investors and can't buy them without 'selling' them to someone else first you may be setting yourself up for a waste of time at best and some potential legal issues at worst.

Bird dogging is a common technique taught at get rich quick seminars that teaches broke people how to tie properties up with a sales contract and then try to sell the contract to a real investor with real cash or credit.

There's really no difference between listing with an agent that can get offers or signing an and/or assigns with a flipper that can't flip. What really matters is getting the best offers.

With all due respect to Mr. Lee, there are get rich quick seminars for both flippers and real estate agents. Both seminars teach broke people how to tie people up with
some form of contract be it a listing contract or a purchase contract and then try to sell the property with no real cash or credit involved.

The best solution to handling these types of situations is with accountability. Hold the flipper to a deadline the same as you would with a licensed agent to his promise.

No arguement from me FSBW; sometimes I think Realtors are the biggest suckers for get rich quick seminars there are. ;-)

Promise more buyer and/or more listings and you can always fill a room for a few hundred or a few thousand dollars a head.

And performing (buying the house) in a timely manner is the best solution to getting your sellers tied up for unreasonable periods of time.

Also, I believe providing some documentation of funds or ability to get a loan is not an unreasonable thing to ask anyone making an offer, "and/or assigns" or not.

In CA our standard CAR form requires proof of funds within 7 days of acceptance. Seller's agents don't always follow thru on it tho & in the case of investors they really should be.

In this case, I asked the clients for "verification of assets" to send with offers (like a pre-approval letter). They provided me with it, so technically, they have "cash to close". Now, I know they never will actually use their own money to close, but they do have it.

Sounds like you're doing all you can do. Other than that I encourage investors to pull the plug as early as possible if they are going to kill it.

I havent seen a bank that didnt have a 'no assignment clause' in their addendum/counter.

I don't see it very often on our (link removed)