Ok, so I've never bought a wholesale property before but recently I've been in contact with a wholesaler about a property he has under contract in north Warren MI. I will be looking at the property in two days and plan to buy it to rent out, if everything looks good, as it fits my criteria perfectly. The only problem is I don't know what a wholesale closing entails. Who is responsible for the title insurance? Do I write an official offer, or is it more informal? Is an EMD common as it is usually held by the title company? If so, who is the check made to so someone cannot just run off with your check? Any other info is also appreciated.
Hi Jeffrey! Its pretty much the same as any other closing... nothing to be too concerned about. You typically will either do a normal contract for you to buy from the wholesaler as they are going to take title then sell to you in a simultaneous closing... OR... you will sign an assignment contract where you agree to give the wholesaler $x,xxx.xx at time of closing to close in his/her contract.
Yes, there is usually EMD written to the title company (neutral 3rd party). I would avoid anyone asking for up-front payment to them. Title insurance, in most states, would be a negotiable item.
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