How exactly do I close now that I have a contract?

25 Replies

Help! I'm new and I dont know what to do. I just signed my first contract for a wholesale flip. Now what?  Do I call a title company and ask them? I dont think I need an attorney for this transaction but what do I know. 

I'm in Texas if that matters.

All comments are appreciated.

Call this the blind leading the blind, but my understanding thus far is the contract assigned to an end buyer.  Once both contracts are in hand, then take to the title company.  

Like I said, call it the blind leading the blind, and I hope some of our more experienced counterparts hop on here to help us

Good luck on your first deal.  Right now, work extremely hard to find an that end buyer/investor with the cash in hand.  Don't forget to report on your results... 

Hopefully, your contract that you signed had some verbage that allows you to assign the contract. That would include '(your name) and/or assigns' or an actual clause that allows you to assign the contract. Then you need to find someone with cash that can buy the contract from you using an 'assignment of contract.' This document transfers your right to buy the property to another person (by assignment) for your assignment fee. That is where you make your 5k that the gurus promise you will make. 

Find your cash investors, market hard, and close this deal!

I've done four deals and all four where fairly simple...

1. Find a seller

2. Have seller sign assignable contract w/ exit clause.

3. Find buyer.

4. Find wholesaler friendly title/escrow company.

5. Take buyer to title company to sign assignment contract and collect non refundable deposit.

6. Keep contact with seller and buyer and let them know of the closeing 

When the deal closes you can collect the check at closing or wait for it  in the mail.

Now this is the process I've been through I guess it maybe different in different situations.

Hope that helps.

I know everyone hates paying attorneys but in cases like this when you are working on your first deals it would help to hire an attorney to make sure the forms you use will protect your interest and truly allow you do what you have in mind. 

Typically if you are buying whole sale houses it means you probably do not have that much cash on hand so you can ill afford to get hurt financially or to get bogged down with problems that will diminish your joy of being involved with real estate deals. 

There is plenty of information here and resources to make sure you understand fully what you are getting yourself involved in and the complete process of your particular kind of deal so do get yourself educated as best you can before doing deals. Wanting to know the process or what you got yourself into after you have already signed a contract is the wrong time to try to get educated about what you are doing. 

You would not be in a hurry to put your hand in the fire knowing you would seriously hurt yourself so take your time and do only what will truly benefit you. Keep in mind that real estate investing is all about making sure you will do things that are of benefit and not detrimental to you. 

I got the Purchase And Sales Agreement from a home study course. In the course however, it was not spelled out exactly what to do once I have the agreements signed by seller and end buyer. This house has been abandoned by renters that trashed it and left all their crap inside. The owner does not want to mess with it. I am doing him a favor.

I spoke with a title company yesterday and sent them the form to let me know if they can do this type of "double close". I should know something this morning so I can now let my buyers list know I have a house for sale.

Thanks for everyone's input. I'll keep ya'll updated.

Well, I have to agree with Jay and Al, however I remember what it felt like when I was doing my first deal. 

The course I took was woefully inadequate and, while it provided a very generic contract form, I had no idea what to do with it after getting it signed. Just how do I close?

I found a title company that sold me a preliminary title report and agreed to record my deed. No escrow, no insurance. I later figured out that I could record deeds myself.

I also later figured out how to read a prelim and what those exceptions mean. 

And the value of title insurance, etc.

This is where I'm at today. I've listed it for 1 day and I have 2 different buyers.

1. Investor will pay all cash now. I make 10k and I'm done, need to find another house.

2. Buyer w/ 20k down and can pay 1k/mo. I will have to renegotiate with home owner and get him to accept terms now that he wants the big check we have agreed on. Im pretty sure I can change his position. I can offer to pay him $750/m (he was accepting 700/mo rent) to accept terms.

To the #2 guy, I would raise the price another 10k just for financing because this is listed as a wholesale deal all cash. Im sure he will take it.

I feel I have complete control of this with the home owner since the house was not even listed for sale. 

Take the 10k now or go with terms that I really have no clue about but will get an attorney to close so my *** is covered. 

Im torn. I know the money is better with terms but im new and i think i need to walk before i run. flipping is easy and not complicated. Terms is complicated but way more profitable.

Lets hear it from all of you....

Title companies may be willing to record the deed. But if you don't buy title insurance, and if you don't give your buyer title insurance, you may not have a truly marketable title. No bank will lend against a property that doesn't have title insurance. Some title companies are bowing to bank pressure and will refuse to insure title in re case of a double close. Do your homework.

don't get greedy.  your first thought was to wholesale.  Don't change that thought in midstream.  You haven't thought it all the way through (either).  Take the 10K, do some more studying and apply what you've learned and you have $ in the bank for your next deal.  There will be a next deal at some point.

Next time determine your exit plan before you start and you will know how to proceed.

I do buy and hold, not flip or wholesale but "don't get greedy"  hold for everything.

Sold the house the first day I showed it yesterday! Yea!! I received $500 down and will walk with $9500 at closing. Today I Met with the closing agent  I have been talking with on the phone and we ironed out some specifics. This was a great first deal. I learned a lot and will be more efficient next time. 

Not bad for a laid off oil driller.

Time to get another house.

Have you done any kind of preliminary title search yet?  Distressed sellers have a habit of forgetting about mortgages, liens, judgments, their ex wife is still on title, etc.

So.. I'm VERY new and have been reading a TON of stuff here. Tammy Vitale you asked about a pre- title search? Is there a checklist somewhere so that I don't miss any COSTLY STEPS like that?? Thanks!
Originally posted by Carolina NA:

@PARISH BENOIT Congrats! Good that you went with the 10K.  So I take it you just did an assignment?

 While discussing this deal with my title agent yesterday I had concluded an assignment would be the route to go but once I got home and really thought about it I have asked her this morning to show me the numbers doing a double close. I have a really hot buyer who wants more houses. I did not allow negotiations on the price I sold it to him. If he knows then the next deal he will know he can negotiate.