Minimum earnest deposit I can legally put up?
Hi BP fam! I have a deal in Pensacola FL and I'd like to wholesale it and possibly put it on the MLS but I don't have much money so I was wondering if I could put up less than 1-3%. TIA
It really depends how motivated the seller is. You just need to put in some money to make the contract legal. You could do $100 or even $10. Explain to the seller that your deposit is strictly to make the contract legal and in no way represents your lack of interest.
@Jay Ben I do $1. You don't need to give them any money though. The contract requires "consideration" which can be anything of value.
what is the purchase price?
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Earnest money is not required to make a contract legal. That's a widely-held belief that happens to be false. So if you're short on funds and find a seller who accepts $1 or $100 to take their property off the market, good for you.
The reality is every seller should demand a sizable EMD held by a neutral third party and clear terms as to when and how it will be disbursed because that EMD is more than likely the only thing a seller is going to get when a buyer defaults.
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@Jay Ben The local mls May, or may not, allow you place it in the mls if you don’t own it.
Quote from @Doug Pretorius:Mind sharing a sample or your contract or maybe tips on how to get a similar contract? Thanks!
@Jay Ben I do $1. You don't need to give them any money though. The contract requires "consideration" which can be anything of value.
Quote from @Jay Ben:DEPOSIT: One Dollar ($1.00)
Mind sharing a sample or your contract or maybe tips on how to get a similar contract? Thanks!
Contract sample: https://pdfliner.com/orea-form...
Consideration can also be a promise to do or not do something. Like: "As consideration for entering into this contract the Buyer agrees to pay the Seller's closing costs."
Most Realtors may tell you 1%. I've worked with many investors who put ZERO earnest money in the contract. Just depends on how you negotiate... There is no right or wrong answer on this one.
Cheers!