Getting a house under contract over the phone?

Question

I was curious am I able to get a house under contract over the phone and just fax the contract to the seller?

Aaron Mazzrillo · Answer

I think I've had just one seller this year ask for a written contract which he signed and returned to me. Everyone else has been verbal followed by an email to escrow outlining the terms. It gets typed up by escrow and mailed to the seller as escrow instructions. The phone call that I make my verbal offer on is typically the last contact I ever have with sellers as well. I make my offer, they accept, they deal with escrow from that point on and by the time I hang up, I'm already over it and on to the next deal. I just wait for escrow to tell me my check is ready.

Contracts are an unnecessary step in the entire process of wholesaling. They only people I hear consistently talking about contracts, non-competes and assignments are complete newbs that most likely also don't know the different between a grant deed and a trust deed.

Belinda Lopez · Answer

Aaron,

the problem we see all the time is that if a house is not under a contract is that other people will try to go around the wholesaler.  There are tons of less than honest folks who were actually taking the wholesale deal to the seller and trying to get them to break the contract with the wholesaler so they could buy cheaper and cut out the wholesaler.  We see this every month.

Also, at least in Texas, you cannot market or list for sale a property you do not have a Vested interest in.  A contract gives you that vested interest.  You can get into all sorts of legal issues if you don't have an executed sales contract.  Technically you're flipping the contract not the property.  Unless you are a broker or agent you can't sell a property you don't own and without that license, again you can get into all sorts of legal troubles.  That's for Texas, not sure about California.

Belinda Lopez · Answer

Yes, happens all the time.  Just be sure to NOT start marketing the property until you have a signed, executed version ready to take to the Title company.  I often mail signed contracts as offers when following up on older leads.  Some mail it back signed, others call to see if it's legit.

Russell Ponce · Answer

Guys are doing it @Danny Benavides ! Listen to @Aaron Mazzrillo on podcast #37. And Alex Joungblood also talks about it all the time.

Rocky V. · Answer

Kudos to you if can get it done over the phone.  You should also consider digital signatures.

Jon Klaus · Answer

Yes, you can execute contracts remotely.

I believe Aaron Mazrillo in Podcast 37 describes doing this.

Jamel Lee · Answer

any opportunity to have a memorandum of contract done over the phone. If this docuement is to be notarized how would that be effective over the phone? doesn't notary have to sing in presence of the two other parties involved?

Getting a house under contract over the phone?

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