Others stealing your deal

Hatfield, PA · Member since 2012 · 1k+ posts · 629 votes

One of the many gurus who regularly emails me, is offering "deal protection insurance" for a price. In other words, magic words to insert into your deal offers/contracts, so someone else does not up your accepted offer by $500 and take your deal.

What wording/clauses do YOU put into your offer letters/deals to prevent other investors taking or the seller from stealing your deals?

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Michael Quarles

Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes

14y

Isn't there a saying that goes something like:

Fool me once shame on you fool me twice shame on me.

Personally. The only thing I need is my mind frame of beating someones *** who tries to steal my deal. Everything else is just talk and words on paper.

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Andrew Jones
Investor · Los Angeles, CA · Member since 2011 · 242 posts · 61 votes
14y
Do not buy this "insurance".

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Monica Breckenridge
Rental Property Investor · Colorado Springs, CO · Member since 2010 · 476 posts · 305 votes
14y
That sounds like a joke. Why do we need insurance. I honestly dont have any issues with investors stealing my deal. If i am under contract with somebody, they like me and want to work with me. You have to build rapport with your homeowners and be their friend. They have to trust you. If a seller doesnt want to work with you why force them. Just kill the deal and move on.
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Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
14y
I totally agree with Monica Breckenridge. Any deal where one party is forced to perform will come back to bite you one way or another!
Private Mortgage Financing Partners, LLC
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Insurance....LOL, wonder if they are listed with the state insurance commission? Oh well...

Make your offers strong enough that 500 bucks won' make a difference!

Good answer Monica
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Carlos Flores
Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
14y
Insurance, HA! Add clause in purchase agreement that says you can record the agreement or a "memorandum of contract." Have the seller sign the memorandum when they sign the PA. You now get to decide if and when you want to record the memorandum, effectively placing a cloud on the title. No need to record it unless the deal goes south, and then you can still decide if it's worth the hassle. Not insurance but it does provide some leverage. Perhaps giving you the opportunity to assign your PA the guy that stole your deal or release the cloud...for a fee.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
What a scam. Forst off, once you have locked the deal, nobody can "steal it" while you are under contract and perform on said contract, end of story.

Now, if you are trying to wholesale a deal to another buyer BEFORE you are under contract with seller, you obviously run the risk of someone stealing your deal, but that is a chance you have choosen to take by not locking the deal first.
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Carlos Flores
Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
14y
I agree with what you are saying Will, but some people won't pursue whats necessary for specific performance.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Originally posted by Carlos F.:
I agree with what you are saying Will, but some people won't pursue whats necessary for specific performance.
True, but that would be there own fault, muy point is just that even if the insurance was not a scam, it is 100% unnecessary if you lock your deal first.
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Bryan Hancock
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Sounds like something designed to profit from newbies being worried about performance on their "wholesale deals" when they are not able to perform if their buyer back out. If you're able to perform I don't see how the insurance would buy you anything.
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Ned CareyPro Member
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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
Ken,
I think you get the point by now about the "Insurance" but you specifically asked

I have had people try to steal my deals. I don't put in any special wording. A well written contract is all you need.

Surprisingly the deal snatchers were an attorney and one by an agent. Both should have know better. Both put the licenses at risk. Because these were $70K profit in my pocket type deals, I did take the time to fight them. On one I recorded a memorandum and the other a specific performance law suit. In both cases the other party immediately backed down from their indefensible position.

I am concerned where you wrote "offer letters". I don't know exactly what you mean by that. A letter of intent is generally not binding. There is absolutely nothing you can put in an "offer" that will protect you. Once you have a ratified contract, presuming properly written, you have what you need. - Ned
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Michael Quarles
Flipper/Rehabber · Bakersfield, CA · Member since 2008 · 3k+ posts · 3k+ votes
14y
Isn't there a saying that goes something like:

Fool me once shame on you fool me twice shame on me.

Personally. The only thing I need is my mind frame of beating someones *** who tries to steal my deal. Everything else is just talk and words on paper.
5 Reply
Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
14y
Michael Quarles LOL - Boy I miss that New York attitude!
Private Mortgage Financing Partners, LLC
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Originally posted by Michael Quarles:
Isn't there a saying that goes something like:
Fool me once shame on you fool me twice shame on me.

Personally. The only thing I need is my mind frame of beating someones *** who tries to steal my deal. Everything else is just talk and words on paper.
I like your style, sounds familiar.
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Account Closed
Wholesaler · Chicago, IL · Member since 2011 · 219 posts · 38 votes
14y
Agreed. I would not be worrying about other people stealing your deals. If someone steals a deal from you, that should be the last time they have the privilage of working with you...END OF STORY. Don't waste any more of your precisous time with them.

Focus your time and effort of pursuing the unlimited number of wholesale deals out there and working with the great number of people out there that won't give you any trouble.
1 Reply
Steve Babiak
Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
14y
Originally posted by Carlos F.:
... Add clause in purchase agreement that says you can record the agreement or a "memorandum of contract." Have the seller sign the memorandum when they sign the PA. You now get to decide if and when you want to record the memorandum, effectively placing a cloud on the title. ...

Actually, you just might NOT be able to decide to record such a memorandum, if your recording rules are similar to where I am. In my county, anything to be recorded MUST be notarized, and must conform to specific page layout rules (at a minimum). So the only way you could decide to record this in my area is if you had things signed before a notary and the document complied with those other rules.
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Bryan Hancock
Investor · Round Rock, TX · Member since 2010 · 8k+ posts · 4k+ votes
14y
Originally posted by Michael Quarles:
Personally. The only thing I need is my mind frame of beating someones *** who tries to steal my deal. Everything else is just talk and words on paper.

Sounds like some good old Williamson County justice to me! I'm right there w/ya Michael!
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Ice cold beer also helps the swelling of the bloody knuckles too!
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Carlos Flores
Commercial Real Estate Lender / Syndicator · Dallas, TX · Member since 2011 · 888 posts · 309 votes
14y
Originally posted by Steve Babiak:
Originally posted by Carlos F.:
... Add clause in purchase agreement that says you can record the agreement or a "memorandum of contract." Have the seller sign the memorandum when they sign the PA. You now get to decide if and when you want to record the memorandum, effectively placing a cloud on the title. ...

Actually, you just might NOT be able to decide to record such a memorandum, if your recording rules are similar to where I am. In my county, anything to be recorded MUST be notarized, and must conform to specific page layout rules (at a minimum). So the only way you could decide to record this in my area is if you had things signed before a notary and the document complied with those other rules.

Here is memorandum filled in Dallas county. It is notarized, but the person that appeared before the notary was the buyer not the seller. Would it stop a title search in its tracks? I bet it would. Would it stand up to courthouse challenge? Probably not, but not many would bother to find out. http://roamdallaspropertyrecords.com/ailis/search.do?indexName=dallasimages&lq=Instrument%3A201100020890

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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
As a buyer, you could file a Les Pendens (notice of suit pending) to follow for failure of specific performance, only takes one party and it will stop any other sale, but you better be prepared to follow up! It would be hard ball and may be a good idea on a large deal.....but really when I lost a deal it has been prior to contracting, so all is fair in love, war and RE.....

We have a sleezy attorney developer here who pulls stuff at the closing table trying to squeez out other commissions, he has never been successful in deals I was involved with and the solution is not to deal with sleezy sneaks. When you lose a good reputation in RE you might as well find something else to do or move out of town because the word travels fast.....
1 Reply
Michael Lauther
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
14y
sorry, double post
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Michael Lauther
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
14y
"Michael Quarles Isn't there a saying that goes something like:

Fool me once shame on you fool me twice shame on me.

Personally. The only thing I need is my mind frame of beating someones *** who tries to steal my deal. Everything else is just talk and words on paper. "]

Looks like Michael's response hit a hot spot with many of us.
Michael, I a have a couple of notes I cant collect. Perhaps I can sell them to you cheap. I am such an un-intimidating character and lack your finesse.
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
14y
Michael Lauther why not start anouther thread about your note, but NOT in the notes for sale topic area....
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Michael Lauther
Investor · Hampton Bays, NY · Member since 2009 · 907 posts · 258 votes
14y
Bill I would but it would be just too embarrassing. It was a mistake and I knew it when I did it.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
14y
Step one: recognize you made a mistake - you have done that.
Step two: get out of your mistake, embarrassment aside.
Podcast Guest on Show #130
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Ryan Webber
Wholesaler · Amarillo, TX · Member since 2008 · 1k+ posts · 659 votes
14y
As long as your contract is legal then no particular wording is necessary. If the seller falls of the planet and stops taking your calls, its probably because they found somebody who will pay more. The best thing to do at that point is file a lis pendens. It cost me somewhere in the neighborhood of $300 to have an attorney file it.

I have no issue making a seller follow through on their side of the contract just as I would have no issue with them making me follow through on my side. That's what a contract is for. Each side is making a commitment to do what is outlined in the contract, and I don't see anything wrong with using the law to enforce those commitments if necessary.

I've done the memorandum and some other jicky filing stuff and if the seller talks to an attorney, they will tear right through that stuff. On the other hand, a lis pendens with a legally binding contract and their attorney will tell them they need to sell it to you. You probably won't end up in court, it usually gets hashed out before that.

Now out of the 10 or so times I've had a seller get cold feet (every time its been because of someone else offering more money) when I lean on them that they signed a legally binding contract and that they are legally bound to sell it to me just as I am legally bound to buy it from them, only 3 didn't just move forward with the transaction with me. On the first two I filed something similar to a memorandum. One came around and the other got an attorney and shredded it. The 3rd time I used an attorney to file a lis pendens and the seller quickly changed his mind and sold it to me.
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