I met with a seller yesterday to sign a purchase contract but he does not want to sign until closing. He verbally agreed to everything in the contract and gave me access to the property.
What are my options here?
- Can I show the property without a signed contract but verbal consent?
- Can I still draft an assignment contract and assign the property?
Would be a huge red flag for me. I would try and figure out why he won't sign the contract (I assume he doesn't want you to "tie" up his property and then not be able to close) and try and put his mind at ease ASAP! Maybe offer 5k down in earnest money or something that is substantial enough for him to feel comfortable signing the contract.
You are not legally allowed to advertise the property if you do not have it under contract. I have in the past pocket shopped deals to my main buyers without it being under contract to see if they were interested, but I didn't disclose the address.
Besides that I do not see how you can assign or do a double closing without the contract from the seller. That is something the title company will need.
You don't have anything to assign?!?! You can't assign a contract or an interest (yours) that doesn't exist.
Besides how are you going to have the title company open escrow on the transaction if they don't even know what that transaction is supposed to be? The stuff in the contract like who's paying for closing costs, the terms of the sale, remedies for different breaches of contract?
Unrealistic sellers are unrealistic.
Your job is to sit with him and have 'the uncomfortable talk' with him until he signs.
Control the sale. Dont let a nervous, scared seller who could change his mind at any time control the sale.
Just my 2cents.
Buddy I love the effort. But you need to spend much more time learning the trade. Please do us all a favor, and double down on your commitment to conducting your business professionally. I don't know if you noticed, but lately wholesaling has become a huge hot ISSUE. Bringing it to BP is great for advice on in action problems. Which of coarse you've done. And received GOOD direction @Micah Copeland .
The RE industry is moving towards regulating Wholesalers. People running around doing business of the cuff like this is a major reason.
You not knowing that you need a signed contract IS A HUGH RED FLAG. Tap the breaks. Watch training Webinars , listen to the Podcasts , maybe even read a BOOK or two.
Become a PRO. Learn to help.
Bryan...I too suspect the seller doesn't believe you can close the deal. If you don't have the cash necessary to put down a significant chunk of EMD, then perhaps you can get him to sign an option contract. That will contractually lock in your ability to purchase at the agreed upon price, without tying up the seller's property, and you will have something that you can actually sell.
But, no...you can't market a property you don't hold an equitable interest in.
If you market a property before you have it under contract, your interested buyer can just go straight to the seller and make the deal that way. Hence, no need for a middle man. A purchase contract is not considered a contract, but an offer until both the seller and buyer has signed it. So you have to get the contract. Find out why the seller does not want to sign! Is he uncomfortable that you cannot close?
A lot of great advice has been given already and I second everything that's been said. Great job getting out there and taking action, but you're missing one of the key actions in wholesaling. No contract, no deal to be assigned. Any work done beyond this point with out a contract is pointless. Without an assignable contract a wholesaler is insignificant. You need to sit down with the seller have the tough conversation and get him to ink the dotted line. If you can't do that you need to just walk away because you'll just be wasting your time.
Thanks to everyone for the feedback. I will be moving on from this deal but I did learn a lot from it so it wasn't a total lost.