getting buyer to pay emd

[David Rey]

how does this work. my understanding is you need to give earnest money for purchase and sale and then get one from your cashbuyer. but people say you can deposit that as your emd but doesn't mean there isn't for the assaignment agreement.

[Lydia R.]

Quote from @David Rey:

Quote from @Lydia R.:

Heres the thing, there are people who will say contract is valid without EMD and so you use your end buyers emd as your own emd. Personally I disagree with this. I always put down my own EMD with a contract and then have my buyer put down EMD when they sign my assignment agreement. Its too messy to try and get EMD from a buyer to then use it as EMD for your own contract. Just negotiate a reasonable amount of EMD between you and the seller and there should be no reason why you cant provide it.

 can you elaborate on messy?

When I say messy I mean, legally the contract you have with the seller isnt valid without EMD. If the buyer wants to cut you out because you need their EMD to put down to cover your EMD they can approach the seller directly, sign a contract with them and claim that your contract is not legally binding because there was no EMD provided. The other way it gets messy is if you are trying to secure the contract from the buyer first without a contract in place from the seller which also provides the buyer the opening to contact the seller directly and cut you out completely. Being the middleman is a precarious position, you have to protect your place in the middle in order to get compensated. The absolute easiest way to do that is to have a valid and enforceable contract with your seller. Remember, buyers are sharks. If they can buy a property and not pay you a fee they will absolutely do it. It saves them money. So having the contract secured first is a crucial step. As far as EMD goes if you are looking at off market deals your EMD should be a nominal amount anyway. Like $100. And if you cant come up with $100 for EMD then you have some bigger problems to solve than trying to get the buyer to put up the EMD for you.