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another buyer, and you’ll lose this earnest money to the deal, so you’d like to keep it small, say $10 to $100. Others have had a clause in the contract to have that amount increased by a certain date before closing. This way you can keep your initial amount very low, and after the assignment your buyer can put up the balance. Of course, there’s also an agreement with your investor buyers that they will reimburse you the amount of the earnest deposit. There is always an approach that will work. Matt has locked up deals with $10 and even $1 in earnest money.
Once you and the seller have signed the purchase contract, you have locked up this property. Nobody else can buy it while this contract is in force. You’ve made a great deal, and it’s time to take it to your buyer. You’ve done everything right, so they will definitely want the deal. You either have a pre-negotiated amount that they will pay you for this assignment, or you can negotiate at this point. Once you have it figured out, you create another contract, this time an assignment contract. Let’s say that your agreement was to receive $5,000 for every deal you bring this investor. You would transfer or sell your rights under the contract by signing this assignment contract calling for payment of the $5,000. Your buyer now “ steps into your shoes ” and is the buyer on the deal you negotiated and locked up.
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