Wholesaling Listed Properties...

Is it possible to wholesale listed properties with out "using" transactional funding and instead just using a proof of funds letter and once offer is accepted mail earnest money?

Here is the scenario. A few months back I made an offer on this probate, my intentions to assign to one of my buyers. The seller declined at the time and decided to list it. Today, the seller had the realtor contact me to see if I am still interested in purchasing it. How do I go about wholesaling this property. They are willing to take what I originally offered, but now the realtor is involved.

Is a possible way of doing this using my purchase contract used in my regular wholesale transactions to tie up the property?

Or have language/ stipulations added in the contract?

Anyone who has done this without using transactional funding and double closing please help me!!

Scott Hubbard

Rehabber · Tucson, Arizona

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Jan 10, 11:02 PM

1. You first need an end-buyer with cash. If you have an interested buyer, then proceed to step 2. If not, you should shop the deal before going under contract since listed properties generally mean you will have a sizable EMD at risk.

2. Since it is listed in the MLS, you're not going to be able to use your contract. However, you may be able to incorporate some of its language in an addendum.

3. On the contract where it says buyer, make sure you put "and/or assigns" right after your or your entity's name. Some REALTOR contracts are assignable and some are not. It may not be necessary to put "and/or assigns". You should check with your local association.

4. Submit your offer. You will have an inspection period to fall back on, but you should also have an Assignment Contract signed and in escrow before the inspection period is over.

Good Luck

George Formento

Real Estate Agent · Miami Beach, Florida

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Jan 11, 07:26 AM

@Scott, I just got off the phone with the Florida realtors legal hotline and asked if I was able to use my own contracts for properties listed on the MLS. I was told I could as long as I am a party to the transaction. I am a realtor, they won't allow me to draft a contract if I am representing someone.

J Scott

Real Estate Investor · Atlanta, Georgia

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Jan 11, 07:39 AM

Originally posted by George Formento

@Scott, I just got off the phone with the Florida realtors legal hotline and asked if I was able to use my own contracts for properties listed on the MLS. I was told I could as long as I am a party to the transaction. I am a realtor, they won't allow me to draft a contract if I am representing someone.

If the seller is represented by an agent, you can probably expect the agent to provide a counter-offer on a state contract, regardless of whether they are countering any terms of the offer or not.

Most brokerages will require their agents to counter on a state-specific contract to ensure that the buyer is protected legally. Of course, if the buyer demands that they continue to use your contract, he might get his way, but if I were you, I wouldn't expect it.

Just use a state contract and add any stipulations/contingencies you feel are necessary.

J Scott, Lish Properties, LLC
Telephone: 770-906-6358
Website: http://www.123flip.com
http://www.123flip.com

Scott Hubbard

Rehabber · Tucson, Arizona

1,031 posts
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Jan 11, 08:32 AM

Originally posted by George Formento

@Scott, I just got off the phone with the Florida realtors legal hotline and asked if I was able to use my own contracts for properties listed on the MLS. I was told I could as long as I am a party to the transaction. I am a realtor, they won't allow me to draft a contract if I am representing someone.

Although I agree with your statement in theory, in practice, however, the broker will unlikely allow a buyer to use their own purchase contract on listed properties just as J Scott states. The state REALTOR associations have spent millions of dollars in legal fees in an effort to deflect perceived legal risk from disgruntled buyers and sellers.

Yes, it is legal to use any contract. Yes, you might be able to find a broker willing to use a non-REALTOR contract. I am just saying you're going to find it difficult and sometimes it is best to take the path of least resistance. Just use the state approved REALTOR contracts with your own verbiage.

Travis Carpenter

Real Estate Investor · Dayton, Ohio

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Jan 11, 08:35 AM

Thanks for your input everyone.

Steve Babiak

Real Estate Investor · Audubon, Pennsylvania

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Jan 11, 11:35 AM

Be sure to check for limitations on assignability; some realtor contracts say that the contract is assignable only with written permission of the seller - you probably don't want that wording, so you'll have to strike it through or have some addendum that overrides.

Jeff Coga

Rehabber · Hollywood, California

53 posts
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Jan 12, 08:23 AM

All contracts are assignable unless other it says no.

Even if they say "no you can't assign it" you can still wholesale it...

Example...
Get the property under contract...
Market it.. find end buyer...
Then make addendum to purchase contract by "adding a buyer"
close the deal...
Quit Claim the "Yourself" of title...

In a nut shell YES - MLS Properties can be "wholesaled"... but with the government intervention (especially the GSE's)... it is alot easier to do equity deals or going direct with the seller...

Jeff Coga

Delondon Dear

Real Estate Investor · 30906, Georgia

142 posts
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Jan 12, 10:04 AM

You just have to make sure you are in the clause. If the seller is smart they will realize that they have nothing to lose here because if the realtor sells it you are out, and if you sell it the realtor does not get a commission. If its in writing you are good to go.