Telling the seller I'm reselling it the same afternoon

I'd put it in the contract, in the same paragraph as the assignment language, because then it's signed rather than remembered. A verbal disclosure at the kitchen table is worth nothing sixty days later when the seller's nephew looks up the second deed. The version I've been drafting says the buyer intends to resell the property, may do so immediately, and may profit from that resale. Two lines. If a seller walks over two lines I probably didn't have the deal.

What does that clause actually look like in a real agreement? I've read three purchase contracts now and the only thing close is the and/or assigns bit on the buyer line, which I understood as a completely different thing until this thread.

@rigging it lives in the same neighborhood as the assignment clause but does a different job. Assignment language says I can hand the contract to someone else. A resale disclosure says I may buy this and sell it for more, and you're agreeing to my price anyway. My call script already says I resell what I buy, which has cost me maybe two appointments out of forty. Sellers who are calling me at all mostly already assume it.

Every seller I've bought from on the construction side knew I was making money. That's the whole reason a contractor is standing in their kitchen. The ones who get upset later aren't upset about the spread, they're upset that they found out sideways. Tell them and stop workshopping it.

The number is what makes people flinch though. 27k on a 104k contract reads as a quarter of the price. If @compass says "I resell and I make money doing it" that's a shrug. If he says "I'm making 27,000 this afternoon" that's a renegotiation conversation, and I don't think it's dishonest to keep the figure out of it when the seller is comparing my offer to her other offers, not to my exit.

I read that Oklahoma requires profit disclosure even on double closes, which would take the privacy argument off the table entirely if you're operating there. I don't know the current text of that rule and I'd want somebody licensed in the state to confirm it in writing before relying on my summary. It made me realize the answer to this thread is different depending on where you're standing.

Had exactly the bad version of this. Small two bed, in at 71k, out at 94k same day. Eleven weeks later the seller's son called me, having pulled both deeds off the county site, and I spent forty minutes on the phone explaining a spread I could have explained in one sentence in March. He never had a claim, he just felt tricked, and I felt like I'd earned it. Now I say the sentence at the table.

I don't volunteer it and I never lie about it. If asked, I answer straight, including the number if they push. Works fine at speed.

@flint that's roughly where I was and then I tracked it. I added a plain resale line to my offer presentation for a quarter and my contract rate went from about one in nine appointments to one in eleven, so call it a real cost. The offsetting thing is that my cancellation rate before closing dropped, and cancellations cost me more than appointments do because I've already paid for title work and locked funding. Net I kept the disclosure. Different funnel, different answer, so I'd measure it rather than argue it.

The document nobody in this thread has looked at is the settlement statement the seller signs. Hers shows one sale, at her price, and that's accurate as far as it goes. The second statement exists in the same file at the same title company an hour later. Whether the closer will confirm the existence of the second transaction if the seller asks depends on the company and on state practice, and I've had two settlement agents give opposite answers on that. If you build a policy of saying nothing, you're relying on a third party's discretion that you don't control. That's the part I'd fix, @compass, before you decide on the script.

I sold two rentals off my own small portfolio, and I'd have wanted to know. Not because I'd have priced differently, I was selling on convenience both times. I'd have wanted to know because I'd have felt stupid finding out afterward, and feeling stupid is what turns a closed file into a complaint.

If you end up disclosing the resale anyway, does the double close still earn its two sets of closing costs? Taking title for the legal argument makes sense to me. Paying for it to hide a spread you've already admitted to seems like paying twice for one thing.

@kestrel the privacy and the ownership are separate benefits that happen to come from the same structure, so you're paying once for two things and you may only need one of them. Which one you need depends on your state and on whether your end buyer would balk at seeing your number.

Written, in the contract, every time. If my plan can't survive the seller reading it out loud I'd rather find out before I wire anything.