Wholesaling - Contract Questions

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Wholesaling - Contract Questions

Steve Christensen
Wholesaler · Saint Ann, MO · Member since 2014 · 50 posts · 27 votes

I am at a loss on what contract to use and what terms I should fill out.

I was recently told that an Option Contract is the least binding, and that if I do find a buyer, that I'm going to have to go back to the seller to get a Purchase & Sale Contract signed anyways.

While I do have the ability to close, if I want, at this time I simply want to wholesale everything I come across. I am licensed, but it is currently inactive, so I don't believe I can use the associations Special Sales Contract.

I am up front and honest with the sellers that it may be myself or another investor purchasing their property. 

With this information, what contract would you use? Is it true that I have to get a Purchase & Sale Contract signed after the fact if I find a buyer and all I have is an Option Contract signed? If that is the case, can I just get a Purchase & Sale Contract signed, disclose that I am marketing the property, say for 15-30 days?

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  • Eric H.
    Real Estate Solutions Provider · Baltimore, MD · Member since 2014 · 571 posts · 452 votes
    10y

    @Steve Christensen Here's how I do it. Please check with a local attorney. Marketing a property "for sale" if you are not the owner or agent may be against the law. Thus, you want to have buyer already lined up. But again, check your local laws and consult with a competent professional that practices in your jurisdiction.

    I get the seller to sign a purchase and sales contract, one in which I had approved by my attorney. I do disclose to seller that property will be possibly 'resold' for a profit. I include a inspection contingency in the contract and inform seller that I will need to have access to the property for possible viewings. To make the seller feel even more comfortable, consider offering a non-refundable EMD. Can be as little as $100 but it will show seller you are serious. When I have found a buyer, he/she signs an assignment contract, one in which I had approved by my attorney. I make sure buyer pays me a significant non-refundable EMD and that agreement is outlined in assignment contract. Buyer also receives copy of original purchase and sales contract to make him/her aware of terms of original contract.

    Hope this helps!

    Sincerely,

    E. Harris

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