Wholesaling Earnest Money

[David Taylor]

Good Afternoon Everyone,

Just a quick question about wholesaling. When it comes to putting a property under contract, there is the matter of earnest money. From what I understand, it is expected to put up a certain percentage of the purchase price as the earnest deposit. What do other wholesalers do in this situation? Thank you.

[Trent Dues]

Hi David, since you are wholesaling in GA, which is an attorney-close state, you will need to open escrow with a real estate attorney's office. If the A-B contract that you had the current owner sign calls for EMD, you as the wholesaler would be expected to put the deposit down with the attorney and once you have your B-C contract signed with the end buyer and the settlement closes, you would get your emd back along with the release fee. The other option is to market the property like crazy and get an end buyer lined up before the call for EMD is due as outlined in your A-B contract and have your end buyer make the deposit.