Buyer wants to assign my assignment. Second fee, same house, my name on the original paper.

Question

Under contract at 142. Assigned to a buyer at 159, so $17k to me, standard one-page assignment, non-refundable $5k deposit from him at signing.

He's now telling me he can't close and wants to assign his position to another flipper at 168. He keeps saying it doesn't affect me because I'm already out. But my name is still the buyer on the original purchase agreement with the seller, and my assignment to him says he assumes all obligations, it doesn't say the seller released me. Title is scheduled in nine days and the seller is elderly and already nervous about how many names have come up.

Two things I want to get right. Am I actually off the hook if the third party blows the closing, and does a chain of two assignments on one contract create a marketing or licensing problem for me in a state where a second unlicensed deal inside twelve months is treated as brokerage?

Rena Expert · Accepted Answer

Assumption without novation doesn't release you. Your assignment made him liable to you and gave him your rights, and the seller wasn't a party to it. Unless the seller signed something releasing you and substituting him as buyer, you're still the contracting buyer on the original agreement and the seller can look to you if it doesn't close. Whether your indemnity language actually gets you money back from him is a separate fight, and that turns on your contract wording and state law, so put it in front of an attorney before the ninth day rather than after.

The $5k non-refundable is the only real asset you have here. If the deal dies, that's your recovery unless you litigate. Price the decision against that, not against the $17k, since the $17k is contingent on a closing you no longer control.

On the licensing question, the count that matters in states like Illinois is transactions you participated in as an unlicensed principal inside the twelve months, and your position here is one. Your buyer's onward assignment is his conduct, not a second deal of yours. The exposure I'd watch is different: if you help find or vet the third flipper, negotiate the 168, or hand over your buyer list, you've moved from principal to something that starts to look like brokering a sale for compensation. How any of that gets characterized depends on the state's specific definition and you need a local real estate attorney on it, not a forum.

Cleanest exit is often to unwind rather than stack. Cancel the assignment, keep the deposit per your terms, and assign directly to the third flipper at whatever number you can get, one link instead of two. You control the paper again and the seller sees one substitution instead of a chain.

What happens if the third buyer's proof of funds is as thin as the second one's?

aaron_fitz10 · Answer

The bit I'd be worried about is the seller. Elderly, nervous, third buyer name in a month. That's the profile of someone who calls a family member who calls a lawyer, and then you're explaining a two-link assignment chain to somebody hunting for a reason to cancel.

Buyer wants to assign my assignment. Second fee, same house, my name on the original paper.

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