Is the NVAR Regional Sales Contract assignable?

Is the NVAR Regional Sales Contract assignable?

Real estate agents and investors ask, is the purchase contract used for real estate transactions in Northern Virginia assignable to another buyer?

You may have heard agents tell you that the contract cannot be assigned. Let me share a story with you.

Recently a new investor doing business in Northern Virginia contacted me about assigning contracts. In his quest for getting his business up and running, he is wisely consulting with and networking with other professionals who have been in the business for a while.

One of this investors long term friends has made a career as a licensed real estate agent who is also a Realtor®. Not all real estate agents are REALTOR ®. To earn the title of REALTOR®, a licensed real estate agent must pass the rigorous standards set by the National Association of REALTORS®.

The investor in my story reports his friend saying that no REALTOR® would take part in assigning a contract. Since the contract cannot be assigned, according to the REALTOR®, he could lose his real estate license if he were to partake having the purchase contract assigned to another buyer.

This story is not uncommon. Many investors report similar reactions by real estate agents when it comes to doing an assignment of contract.

For more information, let’s take a look at the purchase contract used in Northern Virginia.

The contract used by REALTORS® in Northern Virginia is called the Regional Sales Contract which agents get from the Northern Virginia Association of REALTORS®.

As of September 9, 2011, the latest edition of the Regional Sales Contract is labeled NVAR –K1321 –Rev 03/09.

The section of the purchase agreement which addresses assignability is Paragraph 28 on page 8 of the contract. This paragraph states,

This Contract may not be assigned without the written consent of Purchaser and Seller. If Purchaser and Seller agree in writing to an assignment of this Contract, the original parties to this Contract remain obligated hereunder until Settlement.

Ok, let me re-read it just to make sure I understand.

“This Contract may not be assigned without the written consent of Purchaser and Seller.”

I think this means that both the Purchaser and the Seller must agree that the contract may be assigned in order for the buyer to assign it to another buyer. And their agreement has to be in writing.

Ok, I got it. Now the next sentence.

“If Purchaser and Seller agree in writing to an assignment of this Contract, the original parties to this Contract remain obligated hereunder until Settlement.”

I think this is saying that the original buyer can’t escape their obligation to perform under the terms of the contract, even if the original buyer assigns it to another buyer.

Ok, I think I understand now.

Is the NVAR Regional Sales Contract assignable? The answer is yes!

I have assigned the contract more than one time and I’ve even done it on a Short Sale subject to bank approval, something that many people tell me can’t be done. But that is another story.