Non-Assignable Purchase Contract? Your Options

What makes a contract non-assignable?

Usually one of three things:

• An anti-assignment clause in the purchase contract itself, often worded as "Buyer may not assign this contract without Seller's written consent."
• An addendum from the seller, such as a bank, asset manager or government seller, that prohibits assignment or requires the named buyer to close.
• A seller policy stated in the listing or offer instructions.

Axelrad's transactional funding page names the same triggers: the contract forbids assigning, or an MLS, REO or government addendum bans it.

What are your options?

The option to avoid is trying to work around the clause with paperwork that technically isn't an assignment but has the same effect. Some investors talk about assigning the LLC that holds the contract instead of the contract. Whether that is allowed depends on the contract and addendum language, and some addenda expressly prohibit it. Get a real estate attorney's opinion before doing anything like that.

How does a double close solve the problem?

Because nothing is assigned. You are the buyer who closes, exactly as the contract requires. Then, in a separate closing, you sell to your end buyer. A transactional lender funds 100% of the A–B purchase and is repaid out of the B–C closing. At Axelrad, pricing starts at 1 point on the standard double close, with no credit pull.

What about HUD and other government sellers?

Government sellers set their own rules, and their addenda often matter more than the base contract. HUD, for example, sells its homes in stages, with priority periods before a property opens to all buyers, including investors (HUD, How to Sell HUD Homes). Read every addendum, and do not assume a resale structure is allowed because it worked with a private seller. Our guide to transactional funding for REOs covers bank-owned properties and short sales in more depth.

A worked example

Example only, using the figures Axelrad publishes. You have an REO contract at $200,000 with an addendum banning assignment. You have a cash buyer at $230,000. You paid $5,000 in earnest money.

1. You close the A–B purchase as the named buyer. Axelrad wires the $195,000 still owed after your deposit.
2. You close the B–C sale to your end buyer at $230,000.
3. Title repays $196,950, the advance plus a 1-point fee of $1,950, from the end buyer's money.
4. After $5,500 in combined closing costs and the fee, the published example nets $22,550.

You complied with the addendum because you were the buyer who closed.

What should you check before you sign?

1. Read the contract and every addendum for assignment, resale and "named buyer" language.
2. Ask the listing agent whether the seller will consider consent.
3. Confirm with your title company that it will run a double close on this seller's contract.
4. Line up your end buyer and their verified funds before the A–B closing date.
5. Check your contingency deadlines in case you need to cancel.

If the seller is a private owner, consent is often easier than wholesalers expect. Explain plainly that you may sell the contract to another investor, and put the seller's agreement in a signed amendment. A vague verbal "that's fine" will not help you at the title company.

Key takeaways

• A non-assignable contract cannot be assigned without the seller's consent.
• Your realistic options are consent, a double close, closing and holding, or cancelling in time.
• A double close complies because you are the buyer who closes.
• Government and REO sellers often have addenda with their own rules; read them all.
• Get an attorney's opinion before any entity-assignment workaround.

Stuck with a no-assignment clause?

If you have a buyer ready, send both contracts to Axelrad and the team will review the double close for transactional funding. State rules vary; talk to a real estate attorney about your contract.