wholesale advice connecticut

5 Replies

Hey guys, I'm buying a property through a wholesaler and it is their first deal and my first deal with a wholesaler.   They got a contract off a guru that says buyer to pay all closing costs minus back taxes, liens, etc.   
In Connecticut we are an attorney state and I'm wondering if this is typical even for our state.  I don't know why I'd pay for the sellers attorney when it comes to closings.  
Thanks for the help.

I am not back in CT, however I would 100% be sending this contract off to my attorney for review. I have only ever done deals in CT with standard real estate contracts, so I would not be comfortable with that until it was reviewed.

Also if my numbers didn't factor in paying his costs, I would let him know that your offer was not based on being responsible for his costs, and if you have to be, you will be reducing your offer by that much.

I’ve only done two wholesale deals in ct and I believe with both deals the seller paid for their own attorney fees. That being said, depending on how good the deal is I would be willing to pay their fees if it meant they would walk. 

Originally posted by @Jason Arcuri :

I don't know why I'd pay for the sellers attorney when it comes to closings.  

Usually a wholesalers pitch is "fast and easy close", neither of which is synonymous with "pay your own attorney fees" ;)

I agree with a previous poster, it probably makes more sense to offer to pay their fees, and just reduce your price that much. 

I am not sure if there was a legal aspect of this that you were concerned about, but if so, reach out to @Edward Schenkel , he knows his stuff.

Filipe Pereira, Real Estate Agent in MA (#9557050) and CT (#0807610)
(860) 990-9103
Originally posted by @Filipe Pereira :
Originally posted by @Jason Arcuri:

I don't know why I'd pay for the sellers attorney when it comes to closings.  

Usually a wholesalers pitch is "fast and easy close", neither of which is synonymous with "pay your own attorney fees" ;)

I agree with a previous poster, it probably makes more sense to offer to pay their fees, and just reduce your price that much. 

I am not sure if there was a legal aspect of this that you were concerned about, but if so, reach out to @Edward Schenkel, he knows his stuff.

 @Jason Arcuri and @Filipe Pereira:

Jason, you had the right inclination that typically a Seller pays for his/her own attorney's fees and is also responsible for back taxes, liens, etc because the seller is responsible for conveying marketable title. However, when you have situations outside the standard closing, everything really is negotiable. This is typically the case in short sales, wholesaling, lease to own agreements, seller financing deals, etc. In these type of deals, who pays what is negotiated more. Often times when you have a wholesale deal the Seller is motivated to sell because they are not in a great financial situation and do not want to wait to list the property and go through a real estate agent. Therefore, they sometimes need the buyer to pay the back taxes, their fees, etc. Just make sure all that is worked into the purchase price. Often times it is still very much worth it. I also see the Buyer sometimes paying for the Seller's fees and liens in a pre-foreclosure situation or short sale. So the answer to your question it is all negotiable and often times when the Seller is motivated and in a bad financial situation, the buyer negotiates to pay all Seller costs for a further discounted purchase price.

Also, if you decide to wholesale the contract, you should include certain provisions in the assignment of contract (for example that you are making no representations and you are relieved from all obligations under the contract). It is smart to have an attorney review the assignment even though it is typically a short document.

If you have any other questions, please let me know.

Regards,

Ed Schenkel, Esq.

Factor all those extra costs into the Max purchase price and as long as your attorney has reviewed/approved the contract and the numbers work, pull the trigger. Those are just another part of the terms and in my mind, everything (mostly) is negotiable in a deal as long as your profit margins are secured. I've had experience with this type of scenario in the past. 

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