Unfortunately, most of the time you cannot use assignments on foreclosures.
I recently had this problem on a foreclosure. I put the property under contract and the buyer wanted me to assign the contract to him. Because I could not do it I nearly lost the deal, but the buyer decided to go ahead and buy the property from me anyway.
I actually have done a few assignments on foreclosures, so it is not completely impossible - but very unlikely. Just ask, and every now and then you will deal with a bank rep who doesn't care, but Extremely Rarely! I would go ahead thinking that you will not be able to assign the contract.
One way to get around the assignment problem when buying REO's is to put REO's under contract in an LLC then sell the LLC to an end buyer. It takes a little up front work but I think this is an excellent strategy.
One more way to go if you cannot assign the contract to find an attorney that will do a double closing. Or you can find a hard money lender so that you would be able to fund the deal for the flip. I do this all the time: there are a lot of guys who will lend me hard money - even though I hate paying the price. Sometimes it is a grand just to borrow for an hour; but if I can pay 1k to make 5-10k or higher I will do that all day long.
When you are sure the house will sell fast, do what I do and put your earnest money down. Get thirty days to close (I have never had a problem with that except in rare cases where they offered me a super deal if I would close sooner) and start marketing it. The bottom line is if you think you have buyers for the property, don't let anything stop you from making an offer.
