Couple of questions

Couple of questions

Verdun, Quebec · Member since 2013 · 5 posts · 0 votes

I have a few questions about closing a deal from a to z

The steps I learned through the program I'm following are these:

step 1- find buyers

step 2- email real estate agents and say that you're looking for properties that meet the criteria of your buyers

step 3- call back your buyers when your realtor finds something

step 4- if one of your buyers agrees, have the realtor send you the contracts

step 5- have the buyer sign the contract first

step 6- email back signed contracts

step 7- close the deal at a title company or with an attorney

Now my questions are more for 1-4-5

First off, what are some thoughts on having your buyers first? I get the logic since that way you know what to set out and look for right off the bat - but the way I initially learned it was to look for deals then find your buyers

Are both ways the same or is having your buyers first better?

Secondly, concerning step 4, I learned that contracts are construed against the drafter, meaning that whoever drafts the contract is liable and responsible for anything misleading or fishy or sketchy on it

I find this to be super smart and logical - just wanted to see if people share the same thoughts or have any comments on this since I don't really see any added risk to doing it this way

Lastly, concerning number 5, the way this was presented is that having your buyer sign the contract first almost guarantees the deal going through since the buyer is showing commitment and all that - and also, apparently in the real world there's some unwritten thing where when you call back the agent in step 4 and say that you have a deal and to start the closing process, that realtor is now on notice and has officially agreed to be committed to you

is this all true and works? or is this just a bigger risk for nothing - because I'm wondering what if the seller decides not to sell anymore - don't you have to give marketable title at closing to your buyer? since he has already signed an agreement with you

Thank you so much for your answers and thoughts!

Cristian

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  • Rental Property Investor · Where we are parked · Member since 2013 · 584 posts · 178 votes
    12y

    Hi Christian,

    Welcome to BP eh.

    Your answer to question 1 is a matter of opinion and you're going to have to decide for yourself what works best for you. There are a couple of reasons it's good to have a buyers list first. One, you can look for properties that match their specific criteria instead of hoping one of your buyers wants the deal you've found. If you have a deal on a 2/1 and all of your buyers are looking for 3/2 then you don't have a buyers list. Two, if you get a deal and don't have a buyers list you're under the gun to find one. That being said, if the deal you've found is truly a good deal you shouldn't have any problems finding a buyer.

    As for step 4, I am not a lawyer so you should check with one where you live. However, regardless of who drafts the contract you should always advise your seller and your buyer to have the contract reviewed by their agent and/or attorney. It doesn't mean they will and there is always a chance they could come after you. You can always have them sign something stating that you have advised them to do this and it is their choice, that would show that you were not trying to coerce them into a bad deal.

    Regarding step 5, I would never have the buyer sign the contract first. What if the seller decides not to sell for one reason or another? Then you've just sold someone a property you don't own. Again, this is my opinion and others may feel differently. Also, I would NEVER work off of any "unwritten thing" when dealing with real estate. Get a signed agreement with the agent.

    Best of luck!

  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    12y

    All of your steps listed are Not in the correct order, specifically 3-5.

    I am of the strong opinion that you should build a buyers list first before contracting deals, there is just no downside to this order while there are some downsides to finding deals then finding buyers. But that us a matter of opinion.

    Secondly, when wholesaling, you find the deal, then put it under contract with the seller and you First. Then you contact your buyers and offer it. First to agree, send them your contracts for execution, if an assignment, then it is a simple assignment agreement and the original purchase agreement.

    Too many make the mistake of offering deals to potential buyers when they don't have the deal locked up in writing, therefore, they do not have the legitimate right to sell the property and run the risk of circumvention.np,us, doing it this way makes you look like an idiot.

  • Verdun, Quebec · Member since 2013 · 5 posts · 0 votes
    12y

    thank you guys for the replies

    I got these steps from an investor who gave a class that has a law background - and for step five his selling point wast that you have to deliver marketable title at closing not at signing - that's why he said that it's legal to sign a contract with the buyer first before having the actual property - but I agree that if the deal is good and you have a good buyer's database - it shouldn't really matter if he signs first or not and just puts an additional risk that doesn't need to be there - just my two cents and was looking for other people's opinions

    thanks again!

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