Oklahoma City, OK · Member since 2017 · 47 posts · 21 votes
I'm working on buying my first investment property. I'm in contract with a wholesaler, and we were supposed to do the inspection today. However, she can't seem to reach the owner and now we have had to cancel the inspection. This leaves me wondering, just what obligations does the seller have once we have entered into contract. I have invested time and money already expecting the deal to move forward. Can the seller or owner just change their minds without consequences at this point?
Yes it would be, but there's many wholesalers out there who do not follow the laws. For example, how many wholesalers in Oklahoma still use enter into contracts without the financial ability or intentions to close themselves...lots and this is technically illegal in Oklahoma.
As for what the seller can do, its totally dependent on their contract.
Depends on what's in the sellers contract with the wholesaler. Your contract is with the Wholesaler, not the seller. That can be an issue sometimes, especially if the wholesaler didn't explain everything to the sellers. There's some shady wholesalers in our state, who will say anything to get a deal. I've had multiple wholesalers contact me marketing the same property, to later find out none of them had an actual contract on it. I've also had wholesalers send me a wholesale deal that was a property I personally owned, so I know they didn't have a contract on it. I think some of the wholesalers find deals FSBO at X amount and market them at a little higher price to see if they get any bites before even contacting the sellers. Make sure with any deal you buy they're going through a legitimate title company and any funds you pay are to the title co to set in escrow until closing.
Thanks for the response. We are using the title company of our choice, and the earnest money is in escrow with that title company. She showed up with the owner to show us the property, so it seemed legit. And she entered into contract with us after accepting our offer. If she entered into contract to sell the property to me, but didn't have a contract on it herself, wouldn't that be illegal? Hopefully things will move forward, but I'm just wondering to what extent the seller can just walk away after signing a contract without any consequence?
Yes it would be, but there's many wholesalers out there who do not follow the laws. For example, how many wholesalers in Oklahoma still use enter into contracts without the financial ability or intentions to close themselves...lots and this is technically illegal in Oklahoma.
As for what the seller can do, its totally dependent on their contract.
Yep, the wholesalers contract will rule what the seller has agreed to do. I have no problem asking to see the contract if something seems fishy. A legit wholesaler has no issues with this, even though they do not have to disclose this. They know that I know they are doing this "For Profit".