OfflineI'm all in for getting my first wholesale deal and just started putting in my first offer. However, the real estate agent wants $1,000 for earnest money.
How do I get around this? I don't want to spend $1,000 in earnest money just to lose it in assignment. In addition to that I don't have the $1000 to spend on earnest money. I'm planning on putting in 20 offers per month at a $1,000 a piece it doesn't seem reasonable. Help!
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you have up to the time the offer is excepted in which you have 48 hrs to come up with the earnest money , Jim
jbischoff
like Jim said that is true you dont pay any earnest monney upfront only when the deal is accepted & like JIm said you have 48 hrs to get it in.
also don't let the agent tell you what emd is going to be, make it as low as possible, say $250, or if you are in a hot market then $500, and your buyer can pay the earnest $ but you have to move quckly after you get the deal accetped or countered.
Ideally you want to put the earnest money in so you have time to wholesale it, if no buyer then pull out before your inspection time is over & yiou will get the earnest back.
Tony
Go faster do more! GFDM!
Thanks for your response that makes sense but still trying to get my head wrapped around being able to pull out before inspection time is over. Do you put in a contingency clause for a certain amount of inspection time or how does it work?
Thank you for your response!
14 day inspection if you dont have a buyer by day 13 then pull out of the deal. also include in your additional terms & conditions "whole house inspection at buyers sole discretion" to make sure you are covered, and that means you can pull out of the deal for any reason, if you didn't like the color of the paint of the hm in other words.
Tony
Go faster do more! GFDM!
Typically you have 3 days after the offer gets accepted to provide the earnest money. All you have to do is tell your agent you need a couple of days to get the EMD to them because you have to move funds around in a couple of accounts of yours. Now you go out and use that time to line up a buyer so you can take a deposit from them to give to your agent. Also, like Tony mentioned above you don't have to give $1,000 as a EMD unless its a HUD home or certain REO's that banks require $1,000 for a deposit. You can give $250-$500. I usually us $500 for EMD with my agents. And if you are putting out 20 offers, you don't have to worry about coming up with 20 deposits because you should be following the 25/1 strategy that Dean teaches and you will get 1 accepted for every 25 offers. If more than one gets accepted make adjustments top your offers.
Reynold Orozco
Thanks Tony, I've used the 14 day inspection clause.
Reynold, thank you for the explanation and suggestions.
that was good thanks.
Tony
Go faster do more! GFDM!