I am new to real estate investing and there may be an obvious answer to this question. When wholesaling a property should the wholesaler do get title work and an inspection done or have the end buyer do this?
@Dawit Araia welcome to the site.
@Dawit Araia Welcome to a great place for investors.
Assign your contract, title examination should be in the contract, don't spend your assignment until it closes or the buyer defaults, meaning your buyer can inspect title the same as if you were not involved.
Search the threads here and read the recent concerns before you hit the streets.
Good luck :)
Bill Gulley, General Real Estate Academy | https://generalrealestateacademy.com
@BillGulley much appreciation for the info.
@Dawit Araia great question to ask and there are always "a lot of spokes in the wheel" that keeps everything moving right? In other words the best answer I can give is...... it depends.
Deal structure varies from investor to investor , so what you will do on this deal may vary dramatically the way you handle the next.I wholesale & rehab a lot of properties and my typical process is the following:
Once I get a contract with the seller I will send it over to my attorney to begin the process of pulling title because I have multiple exit strategies with every investment I put under contract.I always try to wholesale my properties first, if that doesn’t work then I will fund them, close and begin the rehab.
When I turn around to sell the property as a wholesale deal, I take it a step further to ensure that I do not lose my deposit.Instead of just taking a refundable deposit for an assignment, I structure the deal with an extra document. I use an option contract this way I get a fee as option consideration which is nonrefundable.Assuming that the seller can deliver clear in merchantable title to the end buyer then I can very easily deposit that option consideration and do with it what I wish.
On the other hand, if you are not in a position to fund the and purchase the property then I would absolutely not recommend paying for title or any fees for that matter because you don’t know if you’re able to sell the property yet right?
If you have an end buyer in place then you’ll simply assign the contract and let his / her attorney handle all of the closing procedures from there.
Again in closing….. I’m going to say this, there are a lot of moving parts and every deal is different so just be sure that you are protected and do not spend money out of pocket if we can avoid it.
@michaelkevorkian thank you for taking the time to respond in depth, that makes a lot of sense and helps greatly.
@Dawit Araia Welcome to BP.
I agree with Michael. If you are going to assign the deal to a end buyer, then you should have the end buyers attorney do the title work. Which means you are simply going to email over the Purchase Agreement & Assignment to the buyers attorney. They should handle what is needed.
Also, you want to order any inspections and have the invoices sent to your buyer. Just make sure they are on the same page and want the inspections. It's always best to ask first. Some buyers don't do inspections, they just walk through themselves and then give you a answer.
Best of luck with you coming deals.
Let me know if you have any other questions.
Very informative. Will do, Thanks.
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