TEXAS wholesaling contracts

Wholesaling
8yFollow

TEXAS wholesaling contracts

Jaime Farias
Real Estate Professional · Edinburg, TX · Member since 2017 · 16 posts · 19 votes

Even though I can purchase,  I am starting with wholesaling doing assignments. I was told to get a home under contract via the Option to Purchase contract (include a consideration fee given to the seller) and getting all signatures done with a copy given to the seller. Then finding an end buyer and filling out a Purchase Agreement and the Assignment Contract.

Well, I consulted an attorney and he says this is NOT how it is done. :-/  :-/  He says even if you are planning to assign, that the wholesaler needs to have: 1. Option to Purchase Contract signed with seller and wholesaler  2. Exhibit A -a page with the legal description of the property  3. A purchase agreement between wholesaler and the seller.  He says now I can find an end buyer and have him fill out the Assignment Contract and at this point he will now own my Option to Purchase Contract and my Purchase Agreement.

I have properties(sellers) coming to me and about 5 cash buyers waiting for wks! But I'm spinning my wheels bc of these contract issues.

Thought?? Texas folks please as I need to follow TX laws.

Thank you.

JF

1Reply
319 views

Most Popular Reply

Stephanie Ruiz
Member since 2018 · 1 post · 12 votes
8y

where does one find these contracts? Asked title company and she basically said they do not provide them. Then referred us to TREC. Bottom line, I cannot find all contracts. What do I do?

12Reply
See this reply in the discussion

34 Replies

Jump to latestLatest
  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    8y

    There is some debate as to how to new laws will be enforced. There were clarifications/changes effective Sep 1, 2017. I would just point out that you must make clear you are selling the interest to purchase, cannot advertise the underlying real estate (as that would require a license).

    2Reply
  • Jaime Farias
    OP
    Real Estate Professional · Edinburg, TX · Member since 2017 · 16 posts · 19 votes
    8y

    I hope posting links is allowed. This is the new law in TEXAS

    http://silblawfirm.com/real-estate-law/the-legality-of-wholesaling-real-estate-in-texas/

    1Reply
  • Guy Gimenez
    Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    8y

    1. Purchase agreement between owner and you

    2. Assignment agreement between you (assignor) and the end buyer (assignee)

    Assigning does not necessarily relieve you of your obligations to close on the purchase if your assignee fails or refuses to do so.  

    2Reply
  • Stephanie Ruiz
    Member since 2018 · 1 post · 12 votes
    8y

    where does one find these contracts? Asked title company and she basically said they do not provide them. Then referred us to TREC. Bottom line, I cannot find all contracts. What do I do?

    12Reply
  • Mayit Balit
    Flipper/Rehabber · San Antonio, TX · Member since 2018 · 7 posts · 1 vote
    7y
    Originally posted by @Stephanie Ruiz:

    where does one find these contracts? Asked title company and she basically said they do not provide them. Then referred us to TREC. Bottom line, I cannot find all contracts. What do I do?

     Have you had any luck finding the contracts? 

    0Reply
  • Alan Johnson
    Specialist · PA · Member since 2018 · 85 posts · 122 votes
    7y

    @Stephanie Ruiz @Mayit Balit  Are you looking for purchase agreements for wholesaling?  Or option agreements and option assignment contracts?

    If you are considering option agreements and assignments, they should be developed by your attorney because the requirements differ by state.  However, you can find samples in the book "How To Make Money With Real Estate Options" by Thomas J. Lucier

    @Jaime Farias I'm curious.... did you proceed via the options route, or did you end up using only assignable purchase agreements with the seller which is typically done by wholesalers?

    0Reply
  • Kevin Daley
    DFW · Member since 2019 · 8 posts · 1 vote
    7y

    @Mayit Balit I’m also looking for a lease option to purchase agreement in Texas. Any luck?

    0Reply
  • Giovanni Luna
    Rental Property Investor · Member since 2018 · 110 posts · 9 votes
    7y

    I am having difficulty with this as well. When you find a contract please contact me.

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Giovanni Luna Use the TREC purchase contract for single family 1-4 units

    6Reply
  • Giovanni Luna
    Rental Property Investor · Member since 2018 · 110 posts · 9 votes
    7y

    @Lydia T. What about commercial. Would I need a license for that with wholesale or could I be written as a researcher/ consultant fee in the underwriting? Are there any forms for that?

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Giovanni Luna unfortunately commercial is a different animal. I have no clue what contracts you need.

    0Reply
  • Giovanni Luna
    Rental Property Investor · Member since 2018 · 110 posts · 9 votes
    7y

    Do you know any commercial agents or wholesalers?

    0Reply
  • Ryan Parker
    London, ON · Member since 2016 · 15 posts · 4 votes
    7y

    @Lydia R. I downloaded the TREC contract.  I have never filled out this form before, would you happen to have an example copy that I could look over?

    3Reply
  • Jaime Farias
    OP
    Real Estate Professional · Edinburg, TX · Member since 2017 · 16 posts · 19 votes
    7y
    Originally posted by @Alan Johnson:

    @Stephanie Ruiz @Mayit Balit  Are you looking for purchase agreements for wholesaling?  Or option agreements and option assignment contracts?

    If you are considering option agreements and assignments, they should be developed by your attorney because the requirements differ by state.  However, you can find samples in the book "How To Make Money With Real Estate Options" by Thomas J. Lucier

    @Jaime Farias I'm curious.... did you proceed via the options route, or did you end up using only assignable purchase agreements with the seller which is typically done by wholesalers?

     I was coming from the notes space where almost all transactions begin with an Option. TX state statute recognizes Options, but seems most title companies and attnys are ignorant of the law, sad to say. One of the things many say is that you must intend to perform on a purchase agreement or it could be fraud which is BS.(again, state statutes says you can enter into an option "or" purchase agreement and then assign your interest).  With an option, no one can pt the finger and say you intended to purchase bc it's just that, an "option"

    0Reply
  • Jerel Ehlert
    Attorney · Austin, TX · Member since 2014 · 888 posts · 759 votes
    7y

    You *can* use an option to purchase.  Options beg the question "on what terms", which is why many fill out an earnest money contract to define the terms.  Unless you are dealing with commercial, TREC 1-4 works perfectly well.  You must pay the seller money for the option.  If you want to wholesale, disclose explicitly that you may close this yourself or assign it to another.  I completely disagree with the lege and Texas Real Estate Commission that failure to disclose is brokering.  After that, you assign the option and they exercise the option.  This way would relieve you of the requirement to close if the assignee doesn't, but that can be argued the other way too.

    Most just get a property under contract, the assign the contract.  You still have to disclose the right to assign in the contract.  You are required to close if the assignee doesn't.

    Saying attorneys are ignorant of the law is hubris in the extreme.  Have care or you might end up without representation.

    4Reply
  • Jeff Meeker
    New to Real Estate · Orlando, FL · Member since 2019 · 1 post · 0 votes
    7y

    @Jerel Ehlert

    I was wondering if you could help me regarding the miscommunication on the wholesale process in TX. I keep seeing so many different opinions on what is what. I just want to make sure that I am assigning contracts legally. If there was a way to go over example forms pre-filled out, it would help a lot. I am in Austin, TX and could meet if you have time.

    0Reply
  • Rodney D warren Jr
    Member since 2019 · 2 posts · 0 votes
    7y

    It's best to consult a local attorney 

    0Reply
  • Caleb L.
    Investor · Georgetown, Tx. · Member since 2019 · 149 posts · 69 votes
    7y

    I was told you could use the TREC contract for residential and small multi-family (2-4 units).

    0Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Caleb L. Yes

    1Reply
  • Nicole Washington
    New to Real Estate · Houston, TX · Member since 2019 · 9 posts · 1 vote
    7y

    Hey @Lydia R. After using the TREC with the seller, what contract would you use to assign the property/contract with the end buyer/assignee? Would you mind sharing yours?

    1Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Nicole Washington I use a 1 page assignment of contract

    3Reply
  • Shashank Gokhale
    San Antonio, TX · Member since 2019 · 38 posts · 12 votes
    7y

    @Lydia,

    Hello,

    Please let me know what forms I need to download from the TREC website that I would need as a wholesaler?

    0Reply
  • Shashank Gokhale
    San Antonio, TX · Member since 2019 · 38 posts · 12 votes
    7y

    @Jerel Ehlert Hello, where do I find the necessary forms that would need to be filled out, is there a link or can you provide me those forms please?  I went to the TREC site and I dont see any form with option, so im lost with where to find the forms.  Please let me know

    0Reply
  • Javonte Wimbish.
    Wholesaler · Grayson County · Member since 2019 · 30 posts · 4 votes
    7y

    @Stephanie Ruiz I’m in the same boat. Did you figure out anything.

    0Reply
  • Jaime Farias
    OP
    Real Estate Professional · Edinburg, TX · Member since 2017 · 16 posts · 19 votes
    7y

    Although everyone is teaching to assign a purchase and sales agreement, one CAN use a simple Option contract and assign that Option for a fee. I have spoken to many attorneys and they say it can't be done..I walked away from them bc it was obvious they hadn't read the Texas property code. Sad that they advertise that they are Real Estate attorneys and don't even know the code

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free