Philadelphia, PA · Member since 2013 · 23 posts · 0 votes
Does anyone ever make potential buyers sign non-compete contracts before showing them a house? I was thinking that buyers may say they are not interested in your deal then go behind your back and contact the sellers directly after your contract expires if you do not sell?
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Your term, putting this as a non-compete agreement is not applicable, such are generally for protected market areas as with a franchise. Non-compete agreements can be very restriced in reality as courts shoot right through those poorly or unfairly made.
In RE, you can have a protected period that survives the term of your buying agreement with your seller with an additional period as a first right of refusal. They generally don't exceed the term of your agreement, so if your purchase agreement is for 6 months, you could have a seller agree to an additional 6 months after your purchase agreement terminates. You can also just use a first right of refusal without other agreements.
All you can do is have the seller sell to you at a specified price.
Attempting to get a buyer to only buy through you is a buyer's agreement and you would need to be a real estate agent to have such a captured buyer relationship. :)
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Rule #1: You should have the property under contract before providing address details to any buyers. Then, there is no risk of circumvention.
So my answer is no, I do not have buyers sign them as it is not necessary. Now, in some bulk deals and other instances where buyers must be put in contact with seller, property, or info before contracts are done, then yes, a NCNDA is necessary.
Philadelphia, PA · Member since 2013 · 23 posts · 0 votes
13y
So what is stopping a buyer from just waiting to see if the wholesaler doesn't find an end buyer waiting for the contract to expire then contacting the seller them self?
Investor · Nashville, TN · Member since 2009 · 483 posts · 228 votes
13y
Originally posted by Max H.:
So what is stopping a buyer from just waiting to see if the wholesaler doesn't find an end buyer waiting for the contract to expire then contacting the seller them self?
Really not much you can do and in fact some guru's teach this. However if the first guy couldn't close and doesn't have a contract on it, it's fair game at that point.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Your term, putting this as a non-compete agreement is not applicable, such are generally for protected market areas as with a franchise. Non-compete agreements can be very restriced in reality as courts shoot right through those poorly or unfairly made.
In RE, you can have a protected period that survives the term of your buying agreement with your seller with an additional period as a first right of refusal. They generally don't exceed the term of your agreement, so if your purchase agreement is for 6 months, you could have a seller agree to an additional 6 months after your purchase agreement terminates. You can also just use a first right of refusal without other agreements.
All you can do is have the seller sell to you at a specified price.
Attempting to get a buyer to only buy through you is a buyer's agreement and you would need to be a real estate agent to have such a captured buyer relationship. :)
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Max H.:
So what is stopping a buyer from just waiting to see if the wholesaler doesn't find an end buyer waiting for the contract to expire then contacting the seller them self?
Nothing you can do about that EXCEPT, if you locked up a real deal, than any number of your real buyers on your list will want it, so you have no issues!!!
Northern, VA · Member since 2013 · 141 posts · 29 votes
13y
Originally posted by Max H.:
So what is stopping a buyer from just waiting to see if the wholesaler doesn't find an end buyer waiting for the contract to expire then contacting the seller them self?
The only reason I can see this happening is because your original contract is not as good of a deal as you think it is. If you didn't find a buyer in time, that's probably why. 9 out of 10 buyers won't care if they have to pay you a cut as long as there's still room in there for them.
But to answer your question, I don't think there is any reason to have a noncompete if you already have a signed contract with the seller ... which you should.
Bremerton, WA · Member since 2013 · 9 posts · 0 votes
13y
I'd like to ask this here because it's the first to come up in search results.
What about using non-circumvent in co-wholesaling deals?
I have a situation where the property is contracted with one wholesaler, and there's a wholesaler who KNOWS a wholesaler that knows a buyer... hah.
So there is a seller, three wholesalers, and a cash buyer. I was told to just write the assignment of contract with our three names on there which includes the title companies instructions of a 1/3 assignment fee split.