Property wholesale contracts and earnest money questions!

Member since 2023 · 26 posts · 7 votes

Hey, I learned recently that people need to give earnest money to buyers to close a wholesale contract deal for properties. Is it possible for me to assign contracts where I don't have to pay earnest money to the seller? Let me know.

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Parker Palmieri

Investor · Phoenix · Member since 2021 · 3 posts · 1 vote

Hey Kerem,

I've heard it be done before or with small amounts of earnest money, but it's rare and I've been told it's not proper to wholesale with no EMD.

I JV with wholesalers to fund EMD or double closes all the time if they have capital tied up. I'd be happy to help you if you ever have a deal, let me know!

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Parker Palmieri
Investor · Phoenix · Member since 2021 · 3 posts · 1 vote
2y
Hey Kerem,
I've heard it be done before or with small amounts of earnest money, but it's rare and I've been told it's not proper to wholesale with no EMD.

I JV with wholesalers to fund EMD or double closes all the time if they have capital tied up. I'd be happy to help you if you ever have a deal, let me know!
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Johny Omaga
Member since 2019 · 77 posts · 32 votes
2y
I can help if you dont have EMD. I can help you close , lets connect!
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Account Closed
OP
Member since 2023 · 26 posts · 7 votes
2y
Quote from @Johny Omaga:

I can help if you dont have EMD. I can help you close , lets connect!

I am not currently working on any deals at the moment but when I do, I would like to definitely get some help!
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Hugh CarnahaPro Member
Rental Property Investor · Springfield, MO · Member since 2019 · 86 posts · 35 votes
2y
Quote from @Account Closed:

Hey, I learned recently that people need to give earnest money to buyers to close a wholesale contract deal for properties. Is it possible for me to assign contracts where I don't have to pay earnest money to the seller? Let me know.

I'm a wholesaler in a similar market in missouri. We actually are thinking about moving into the b/cs area as well. For us we try to get away with not doing emd however my partner who wholesales out of california does $500 to $1,000 down. Make sure you have the backup contingency in there so you can get it back. Also (just to cover all the bases) make sure 100% that you give the emd to the title company and not to the person directly.

On our contracts we use earnest money deposit of "_____(dollars)" so we can hand write in whatever we want. But most of the time I'll default it to zero. Some more sophisticated sellers and mom and pops might ask for $500 or 1000 down. 90% of deals we find are happy to possibly even get rid of their house so they don't bother signing anything. Also you said assign the deal, I work out of the same day double close side of things so nobody knows what the spread is. In that case I'll often pass an emd to the end buyer so I'm not actually coming out of pocket. I only did assignments once and the agents involved got super pissy.
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Bob S.
Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes
2y
Quote from @Account Closed:

Hey, I learned recently that people need to give earnest money to buyers to close a wholesale contract deal for properties. Is it possible for me to assign contracts where I don't have to pay earnest money to the seller? Let me know.

Of course not. NOBODY in their right mind is going to contract with no EM, you are not anywhere near ready to even put in offers. Go to a meeting , learn then apply what you learn
Good luck
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Tom GimerBusiness Member
DMV · Member since 2017 · 3k+ posts · 3k+ votes
2y
Earnest money is not a requirement for a valid contract. I promise to pay $W to X seller on Y date for Z property and X agrees to transfer over to buyer Z property at settlement is a valid contract if properly executed by persons with capacity and the property is reasonably described.

Think about it. Is there really a difference between $0 EMD and $100-300 EMD? Not much.

That said, would I ever take my property off the market without a suitable EMD and a method of forfeiting it? Hell no.
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