1st post..... REO flip.... Default Concern

[Scott Morse]

Hey guys...

This is my first post, so I hope this community of fellow entrepreneurs can shed some light.

I am in the beginning stages of doing my first double close. I found the house I was interested in (REO) at a price I think can move, and I also have a buyers list already up and running.

Where I am scared is that in the agreement that the realtor sent me (which seems to be common place for Virginia) has a clause labeled DEFAULT. Basically what it says that if for whatever reason either party defaults on the agreement - the defaulting party has to pay the commission which should have been generated (6%) on top of losing the EMD.

Because I am treading lightly into my first closing, I am aware something could go wrong and need to back out within the 30days given to close. Please someone help with how to get around this extra penalty of having to pay the commision. I am a big boy and understand losing the EMD, but I dont understand paying his commission as well....

All Help APPRECIATED.

THANKS TONS and GOD BLESS

[Jon Holdman]

That's a nasty provision. Having to bail out on a contract and losing the EMD is part of the business. Hopefully, it never comes to that, but at least you know what's going on if it does. But to have to pay a commission too is BS. The property will go back on the market, and the agents will have a chance to earn their commissions. Strike this out.