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Forums » Wholesaling » Deposit money if you're going to wholesale the property?

Deposit money if you're going to wholesale the property? Subscribe to Deposit money if you're going to wholesale the property?

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Erik Carrion

Real Estate Investor · Brooklyn, New York


Forum_avatar_avatar-ardentambition

Icon_minipost Oct 19 '08, 03:11 AM

Most purchase and sale contracts include a deposit clause. As a wholesaler is there a need to make a deposit? Should you, as good faith? Or can you avoid it by being upfront with a seller about your position?

Edited: 06/26/2010 at 06:10AM


Jason Cummins

Real Estate Investor · Katy, Texas


Forum_avatar_avatar-cumminshomesllc

Icon_minipost Oct 19 '08, 10:23 PM

Several answers to your question. Really it all depends on state specific RE laws as well.

Generally I try to never put any money down for deposit on a wholesale deal, if I do it is typically $10 - $100. Every once in a while you will need to put a bigger deposit to snag a great deal.

Typically a buyer in a distressed situation will not care about a deposit.

Never give your deposit to the seller. If you agree to make a deposit, send it along with the contract to the title company or whoever you are closing through.

Edited: 06/26/2010 at 06:10AM


Will Barnard

Rehabber · Santa Clarita, California


Forum_avatar_avatar-barnardinc
DonorPro

Icon_minipost Oct 19 '08, 10:27 PM

While Jason's answer may work for inexperienced sellers, you will find that a savy seller will require an EMD greater than $100. I would never accept a purchase contract that was assignable or not, with only having $100 as "skin in the game" for the buyer.

Of course, as the buyer, offer as little as possible, when applicable. In order for a contract to be official, in most states, you must place some amount of financial consideration.

Edited: 06/26/2010 at 06:10AM

Small_barnardenterprisesWill Barnard, Barnard Enterprises, Inc.
E-Mail: info@barnardenterprises.com
Website: http://www.barnardenterprises.com
info@barnardenterprises.com


Erik Carrion

Real Estate Investor · Brooklyn, New York


Forum_avatar_avatar-ardentambition

Icon_minipost Oct 19 '08, 10:28 PM

Jason, thank you for your reply. I'm launching this whole thing this week and I've been reading my back off. Right now I'm in the process of putting together my PSA and Assignment contract.

I was wondering though, on the assignment contract should you include a clause that stipulates the %age of your fee that you want up front and a separate clause stipulating the total? Or should you just stip. the total fee and then informally in your communications with the seller tell him what you expect?

Edited: 06/26/2010 at 06:10AM


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