This IEE contract is confusing me big time

They're both purchase agreements (referring to Forms and Docs on DG.com for Agreement to Purchase & Purchase & Sales Agreements docs). Both have the "and/or assignees" clause in them giving you, the Buyer, the right to sale the contract to another end buyer. If that essential language wasn't in contract, then you wouldn't be able to assign (unless you requested in your addendum to lender and they accepted your contract as is) or sale contract & you would be liable to purchase the property on the agreed upon terms yourself. Its how you write up the contract for IEE that makes difference compare to just doing an ordinary Assignment of Contract sale. For IEE, you have more paperwork (has to be sign by all parties, including end buyer) compare to AOC. Someone, who has actually done IEE recently, hopefully will chime in and share their deal details with you so that you get a better understanding how to write up contract and what to say to the seller when you're doing an IEE deal.

So are the real estate attorney's familiar with these IEE type contracts? I spoke to an attorney yesterday and it sounds like he had no problem helping me with my deals but I wanted to send him a copy of the contracts so he will know exactly what I am talking about.

will be the determining factor in answering that question, whether they themselves have done IEE sale. Thing is you have to wait & see what he says & whether he's done IEE contract himself for any investments he's done or know of other clients who've done an IEE for their deals. Keep me posted though.

Think of the IEE process in three parts.
Part 1. The purchase contract beteen the seller and the investor and the investor disclosure statement and seller's acknowledgement are signed by seller and investor. That gives the investor the right to "resell".

Part 2. The purchase and sales contract between the Investor and the End buyer is completed at a higher price than the Seller/Investor contract.

Part 3. Investor brings together the Seller and the End buyer and agrees to terminate both existing purchase/sales contract and oversees a new purchase/sales contract is completed directly between the Seller and the End buyer under the same terms as the end buyer agreed to. The discharge agreement is signed which releases the Investor from the two original contracts. The investor takes the new buyer/seller contract to the closing agent and includes the invoice for his compensation to be sure he gets paid for putting the deal together. Be sure to keep copies of all contracts even though only the final buyer/seller contract is seen by the closing agent.

Does anyone have a good IEE contract that they could email to me? I don't see one on the forms and docs section. Only the purchase agreement is there. Are they the same form? Let me know if you have one and I'll PM you with my email address.

Thanks,

Brian

The IIE concept makes more sense to me because with this approach the seller still gets his home sold, the investor gets a good profit and the end buyer gets the property. Does the seller see how much profit the investor makes with IEE like they do on assignments? I would think they would but I've never done an IEE before. If so, double closing might be better if investors don't feel comfortable with the seller knowing how much profit you'll be making on the sale of their property. Just thoght I'd through that out there. Best of luck to all! This site is amazing!

I would love to know if anyone here has used the IEE strategy to get a deal done. I an shifting most of my energy in this direction after dealing with frustrating MLS properties. I called my attorney today but he said he would charge me $225 for an hour of work or looking over paperwork. I don't have the money so I will just go ahead and do an IEE transaction and hope that it all goes through. I will let you guys know how it goes. Thanks!

since most banks do not like assignments, can you use the IEE method(4 documents) if you plan on buying an REO. in deans book he says use iee method if you have a buyer who needs financing but can also use the iee method if you have a cash buyer? when dealing with an reo, most banks do not like assignemnts

this will not work with an REO , try double closings .

What is your email?

so if its an REO you cant use the IEE method or the assignment? how do you go about to a double closing?

You would use one of these services (e.g. Coastal-Funding, Hartwell Ventures, Cash for my closing, etc) to fund a double closing or simultaneous closing. Just may sure you read over the bank's addendum. Title company or attorney would handle the closing. Let them know what you're doing.

This is going to be long everybody, but I didn't want to start another thread so I guess this is as good a place as any.

I have a few questions about the IEE process. I have re-read both of Dean’s books and spent hours on these forums trying to understand the “timeline” concerning an IEE deal. I don’t have the money to hire a Real Estate Attorney and haven’t found a Realtor yet so I’m trying to do as much of this as I can by myself. (hopefully that will change later)

I’m going to outline what I know so far in a hypothetical situation below, whether it’s right or wrong I hope you guys can correct me where I’ve made mistakes.

Now this whole discussion is based on the hypothetical situation (your’s may be different, but I think this is the crux of it) where you have done the following:

1.) Found a FSBO property that meets your criteria.
2.) Extended a verbal offer to the seller of $100,000
3.) The seller has verbally accepted your offer of $100,000 (nothing in writing yet)
4.) You drive over to meet with the seller and bring documents (discussed below) for both of you to sign.

NOTE: In this example no Real Estate Agents are involved
NOTE: This example is for FSBO only (this doesn’t mean the IEE process cannot be used in other circumstances, I’m just trying to simplify this so I don’t confuse myself! )

Here we GO!

1a.) Initially, you tell the Seller what you would like to do (which is an Instant Equity Exchange, or IEE) and ask the Seller to sign the "Investor Disclosure Statement and Seller's Acknowledgment" form (found on Dean's website). (full disclosure here just like Dean said)

1b.) The Seller is comfortable with this, signs it, and agrees to let you:

A.) Buy the property at the price you have verbally agreed upon ($100,000)

–OR–

B.) “Sell” the “rights” to the Purchase Agreement (which you and the Seller haven’t filled out yet) to an END BUYER for some profit, say: $5,000

C.) The Seller agrees to give you 45 days to do accomplish either “A” or “C”

2.) You and the Seller sign the “Purchase Agreement”

Questions I have for Parts 1 and 2:

Question #1.) Do you have to cut and paste the "Investor Disclosure Statement and Seller's Acknowledgment" form into the Purchase Agreement?

Question #2.) Let’s say I want to make $5,000 on this deal. Do I have to ADD any verbiage/clause to the Purchase Agreement indicating that I can sell my “rights” to the Purchase Agreement to an END BUYER for $5,000? – (PS I don’t think this is the right way)

Onward to steps 3-6!

3.) You find an END BUYER

4.) You call the Seller and let him know you’ve found a new END BUYER (someone other than you)

5.) The three of you (YOU + END BUYER + Seller) meet at Denny’s and fill out a new Purchase Agreement between the Seller and the END BUYER

6.) You have the Seller sign the “Discharge of Agreement to Purchase” form (there’s a link to it somewhere on this site or pg 162 PFRERN) This form voids the original Purchase Agreement between YOU and the Seller.

Questions I have for Parts 3-6:

Question #3.) I’m a little fuzzy on how the NEW Purchase Agreement between the Seller and the END BUYER is filled out???

a.) Is the NEW Purchase Agreement between the Seller and the END BUYER filled out for $5,000 more ($105,000) than the original Purchase Agreement, and at close the Seller pays me $5,000??? What form ensures that he pays me??? Does the "Discharge Agreement to Purchase" do this? Is this also referred to as "The Invoice?"

-OR-

b.) Is the NEW Purchase Agreement between the Seller and the END BUYER filled out for the same amount as the original ($100,000) and the only thing we do is ADD a clause to this NEW Purchase Agreement that states that the END BUYER is responsible for paying the Seller $100,000 and ME $5,000?

-OR-

c.) Does the Seller and the END BUYER fill out a NEW Purchase Agreement for $100,000 and at the same time the END BUYER fills out some type of other contract with ME stating that he will pay me $5,000?

In other words, How do I get paid? Who pays me? Which specific document ensures I get paid??? Do I have to make up another contract that states either the END BUYER or the Seller pays me???

The Final Steps!

7.) The Seller, the END BUYER, and ME meet at the Title Company

8.) The only documents I have to bring are the “Investor Disclosure Statement and Seller’s Acknowledgement” form and the “Discharge of Agreement to Purchase Statement”

9.) Title company verifies everything is correct

10.) Party like it’s going out of style!

Questions I have for Steps 7-9:

Question #4.) Do I HAVE to have a Real Estate Attorney with me when the three of us (Seller + END BUYER + ME) meet at the title company during the close? Do all THREE of us have to be at the Title Company at the SAME TIME?

Question #5.) Do I have part (1b) correct? Is it correct to say that the crux of the IEE deal is to allow you to essentially sell the “rights” of your Purchase Agreement (signed with the Seller) to an END BUYER?

Some have referred to it as selling the house FOR the Seller… Heck, even Dean’s “Investor Disclosure Statement and Seller’s Acknowledgement” form states:

“Investor will SELL said Property to another party for approximately $$$$ more than the amount for which the Investor purchased the Property from the Seller.”

This is confusing to me. I thought we weren't "Selling" the property for the Seller. Is SELL the right word to use for this? We are only selling our “rights” to the Purchase Agreement to the END BUYER, not the property itself…

Thanks everybody for bearing with me on this. I’ve re-read both of Deans books and spent hours of these forums, but so far I’ve heard multiple different explanations of the IEE process.

I hope that someone out there who HAS done this type of deal (IEE) can answer these questions for me and any others who might find interest in this. Hopefully others on this site will benefit from this thread too.

I’m not trying to be too picky, but when/if you do respond could you please indicate which question you are answering, i.e. (Question #2, Question #4) that way, the responses won’t get too garbled up.

Thanks Everybody!

Rob

Does anyone have a mock IEE contract filled out that I can use as a resource? I know that in the book it says that the blanks are self explanatory however, I want to make sure that I am doing it correctly when filling them.. And while we are at it, any other documents between buyer or seller.. Can I get an example of each of those? Thaanks

I agree w/ Erick D

This is all sooo confusing, and I just don't understand.
Maybe it's just me?
There is more research involved and not enough info to really help you unless you have some sort of exp. doing this.

Sorry i'm just trying to put it all together about "IEE" and "assignments"

Ryan