Earnest Money Deposit for Wholesale Deals

I Havent been able to get out of Putting EMD..I have to at Lease put $500 down. You Have to open Escrow and that takes Money...But If your working with a FSBO thats a different story.

Yes. I'm working directly with a FSBO. I know that I should be asking my attorney these things. I just sent him over a few documents but, I may need to add in some more words to my agreement and resend it back to him. I'm just trying to get my thoughts together before he call's back.

So, that being said, do you know if the contract can still be binding without putting any money down?

Contracts are binding once they are endorsed by both parties. The money does not make a contract binding unless it is listed in the contract and agreed upon by both parties. If you put 0 down on your contracts and both parties sign it then it is a binding contract.

How about the information for the title company? Since I won't be closing on the property, should I leave that information on the agreement blank to fill out later?

You Beat me to it..I was just answering him..I guess I type to slow

Just put "To Be determined".

For the contingency, will I be able to hand write that on the addendum?

Property is subject-to 30 day inspection.
OR
My partner has the right to review within 30 days.

Will that be enough of wording for a contingency?

Well, whatever that particular seller requires and agrees to for an EMD is in that seller's court. Of course there are real hucksters who can get a seller to agree to anything.

As far as contingencies go, I've NEVER seen a 30 day inspection period (unless you're dealing with commercial and/or industrial properties), and I've got 2 active licenses. Usually, you get about 7-10 days.

Generally there are 2 exit contingencies: getting funds approved and inspections.

Wish I could be more help, but your details are limited.

I learned a long time ago that if you don't ask, you'll never know. However, you don't want to scare away a bear because it only takes 1 bear to fill a bear trap!

Good luck!

JennyInMalibu

I put "Contract contingent upon partners approval". If you can't find a buyer (partner) then the contract is void. It's a great exit strategy.

I also have the following in my contract...

ASSIGNMENT: During the contract period before closing, buyer has the right to show potential buyers the property, place a for sale sign and lock box on the property, advertise the property, and market and/or list the on the multiple listing service (MLS) to sell property with the intention of freely assigning this contract and reselling this property. Buyer and Seller agree that Buyer intends to resell this property. If Buyer does not find a third party buyer for the property, he has the right to cancel this contract.

I am up front with my sellers. They know what I intend to do with the property from the start.

locked up a property for $1 before, like Carol said, whatever you put in your contract and both parties agree to is what you have to abide by.

My title company is TBD

My exit clause is 14 Day inspection

My contract states assignable and has permission to show, put for sale sign, market online/offline

Contract expires in 60 days.

Seller pays up to $1000.00 for TREATMENT of any pests(termites, etc) found during pest inspection.

Good stuff Carol. I just told the owner that I'm working with a few other investors. But, I guess I should be a little more transparent. The owner sounds like a really nice person and probably wouldn't mind going that route as long as he get's paid. Thanks a million!

I have 3 agreements attach to this post. Do you know if I should have my Non-Circumvention, Non-Disclosure and Confidentiality Agreement signed between me and the seller & another signed between me and the buyer just in case if my buyer would like to see the home without paying me yet? Or should I just have that signed between me and the buyer?

NCND, the buyers I have won't go around me. We know each other personally. Build relationships with them and you won't have a problem with NCND.

But, until I get to know them, do I have to Get both parties to sign a separate one?

Do a deal with them until you get to know them. Buyers hate when you want then to sign a for saying they wontsteal the deal from you. Only do busines with honest people.

I'll give it a try and see how it goes.

We rently had an reale state attorney attend a Two Rivers REI meeting here in Iowa, inform us that it is not nessicerary to have earnest money envolued to make a contact binding, just an agreement on paper with both parties signing the same. I beleive this is ture every where, over time I beleive it is the realtors who have introduce this to the industry to asure there sale, of course over time its envolued into a common occurance , the realtors today require a proof of funds before they even talk to you about property, what ever happen to a handshake and honor. I'll tell you greed from realtors and bankers alike, I try to avoid both, will limit how much I use them for sure. Always work with private owners when ever possible save everybody headaches and money not using banksrs or realtors, good luck out there, Action+Knowledge=Success...........$$$$$$$$$$$$$........

Let them know if they choose to buy your deal, there is a $1k non-refundable em deposit at the time of contract signing. A lot of re gurus teach this, because you'll know the fake buyers from the real buyers. Or, you could ask to see a proof of funds letter or copy of their bank statement.

Invest Des Moines wrote:

We rently had an reale state attorney attend a Two Rivers REI meeting here in Iowa, inform us that it is not nessicerary to have earnest money envolued to make a contact binding, just an agreement on paper with both parties signing the same. I beleive this is ture every where, over time I beleive it is the realtors who have introduce this to the industry to asure there sale, of course over time its envolued into a common occurance , the realtors today require a proof of funds before they even talk to you about property, what ever happen to a handshake and honor. I'll tell you greed from realtors and bankers alike, I try to avoid both, will limit how much I use them for sure. Always work with private owners when ever possible save everybody headaches and money not using banksrs or realtors, good luck out there, Action+Knowledge=Success...........$$$$$$$$$$$$$........

That's some good info. Cause most of these homeowners that I speak with hate realtors. They, just get properties and let them sit on the MLS.

Read over my assignment agreement that I have attach to this thread. I have in there that my FEE is non-refundable, due and payable today. I really don't know about not using the NCNDC agreement. I'm going to be pitching to a few buyers and I wouldn't feel comfortable about letting all them come check out the property without signing a NCNDC. I don't know them like that. They might want to check it out before they put the funds down.

DO NOT WORRY ABOUT NCND!

THEY CAN NOT GO AROUND YOU IF IT IS UNDER CONTRACT!

STOP OVERTHINKING THINGS!

GET TO KNOW YOUR BUYER

GO FIND WHAT THEY WANT AND LOCK IT UP!

THEN SELL IT TO THEM

DO NOT MAKE THE FEE NON REFUNDABLE!

WAIT UNTIL CLOSING TO GET PAID!

END OF THREAD!

Ok ok ok! I will give it a try. Soon as a I get it under contract I'll make a thread. It should be by next week. I'm waiting on my attorney to get done reviewing my contracts and then I can get to work.

This is a comment about dealing with people. I know you don't want beginners commenting, but this is just from me dealing with people, like asking someone to do something, buying something from people, whatever.

Listen to what people say, how they say things, watch their facial expression, and how they act. Observe them so you can get a "feel" for what kind of person they are. Trust your gut feeling if you feel like your buyer isn't honest. The true character of a person shows up in the little things they do or say. Thats been my experience anyway.

RENinja

I'll be working with a few investors that have had a couple of properties & I will do as everyone say. I have nothing to loose. Thanks to you and to everyone else on here for helping me out!

Huh? Where's it say that? LOL Everyone was a newbie at one time...
We all share our knowledge, don't we? Every time I read the blogs, I learn. Thanks for your input!

Happy Prospering! ~Kat

Ecclesiastes 3:1-8

Kat S. Snyder wrote:

Huh? Where's it say that? LOL Everyone was a newbie at one time...
We all share our knowledge, don't we? Every time I read the blogs, I learn. Thanks for your input!

Happy Prospering! ~Kat

Ecclesiastes 3:1-8

I rather get my questions answered from people that are out here taking action. If you're getting started, you don't want to run with the people that's just getting started, you want to run with the finishers. STAY FOCUS and TAKE ACTION!