Real Estate Investor · Albuquerque, NM · Member since 2011 · 156 posts · 20 votes
When having the seller sign the contract, I understand that you can put 10$ on it to secure the contract, but if seller asks you why you are putting in so little what do you them? Don't they want to know that you are serious? As I am going to be collecting a deposit from my end by to know he is serious, how is the motivated seller going to know I'm serious off of 10$, and is there any law, or rule that states you must put a certain amount to secure the contract?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
Matt,
I don't know all 50 state laws, but most of them I do know about state that you need to have "consideration" for a contract to be binding. That consideration could mean lots of things.
In the grand scheme of things, you need to be putting more than $10 down anyways, that makes you look unprofessional in my opinion and I don't care what any guru says otherwise claiming that you should use as little of your own money as possible. Secondly, why would you even want to only put down $10? Even a $100 is low, but if you did use $100, I would tell the seller that once the contract was fully executed in escrow, and the due diligence period was over, that you would be placing additional earnest money prior to closing. That should appease their minds.
Real Estate Investor · Midwest City, OK · Member since 2011 · 97 posts · 2 votes
15y
I'm still confused on this whole earnest money business when wholesaling and assigning a contract. Here is a scenario and please tell me if its not right or if i need to add or subtract something..........So I meet the seller at the house to put property under contract. Then after we fill out the contract. Then I give earnest money and contract to title company. Then I find a buyer and sell him my contract and fill out an assignment fee. Then the end buyer gives EM and assignment and copy of purchase contract to title company. Buyer and seller close and I get a check in the mail........Now is that accurate or wrong?
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
15y
I agree with this. I too write up the offers with a very quick close often 3-5 days, knowing full well the bank will send me their addendums which almost always has at least 10 days and often 17-30 day close schedules as they just cant work as fast as us investors can. But the point is, the small close time in the offer shows a willingness and ableness to close the transaction which adds more weight to the offer.