Hey everyone! Im new to wholesaleing and have been cold calling leads for the past couple of days and came across a seller willing to let the property go for under market value but is requiring a 15% down or EMD at signing. I would appreciate any advice as to how to go around that or how to come up with that EMD. I am willing to connect and bring in a partner that would take over and just let me tag along the ride for experience with no assignment fee. Thanks in advance!
1% EMD is standard, and plenty, for an off-market deal. 15% is RIDICULOUS. Either that seller isn't motivated, or they just simply don't understand how buying real estate works. If you can't negotiate him down, run (but don't forget to follow up in a few months after he's been told this same 1% truth from dozens of other buyers :) )
1% EMD is standard, and plenty, for an off-market deal. 15% is RIDICULOUS. Either that seller isn't motivated, or they just simply don't understand how buying real estate works. If you can't negotiate him down, run (but don't forget to follow up in a few months after he's been told this same 1% truth from dozens of other buyers :) )
@Daniel Salmeron As Ryan mentioned, 1% down for EMD is pretty standard. Here in VT, many houses I've bought have been in the $100k-200k range, so only $1-2k down. In the past we've sometimes moved it up to $2500 just to catch their attention that we're serious buyers.
1% is typically the standard here in Phoenix as well but really if you're a cash buyer like you say you are then 15% shouldn't be a big deal, as long as you have an inspection period you can get it back. I would also recommend finding a cash buyer to partner with to put up the money
Hey everyone! Im new to wholesaleing and have been cold calling leads for the past couple of days and came across a seller willing to let the property go for under market value but is requiring a 15% down or EMD at signing. I would appreciate any advice as to how to go around that or how to come up with that EMD. I am willing to connect and bring in a partner that would take over and just let me tag along the ride for experience with no assignment fee. Thanks in advance!
If the seller is asking you for such a large EMD, it is because the trust isn't there. He might be (probably is) thinking you will not fulfill your promise to buy. You need to have/build stronger rapport with the seller and speak from confidence of this being a normal thing you do (buying off market properties).
You want to say something like "Hey MR./MRS. BUYER, putting $15% down is unusually high... I buy 5-10 homes a month and the typical amount I put down is $500. I can put $1,000 to make you feel more comfortable but at 15% it would not make sense for me to tie up that much money, especially if I am closing quick with all cash."
You can follow up with "Imagine if I put 15% down on all my properties, I would have so much money tied up and it would hold me and my partners back from buying other houses. Your house is not the only one we are looking to buy this month. So let's do the $1,000 and get everything moving."
3% EMD is standard here in So Cal (at least for MLS listed deals). 15% is a lot to ask so I would have to question why seller wants so much. Perhaps it is how you came across or perhaps the seller is unreasonable. Either way, everything is negotiable.
Regardless of the EMD, you should have a true and proven cash buyer already in hand for this deal, that way, you can use your cash buyer's money for the EMD and put them on the contract direct with an agreement for your fee. Sounds like you put the cart before the horse and found a deal before you found a real cash buyer.
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@Daniel Salmeron As Ryan mentioned, 1% down for EMD is pretty standard. Here in VT, many houses I've bought have been in the $100k-200k range, so only $1-2k down. In the past we've sometimes moved it up to $2500 just to catch their attention that we're serious buyers.
Good luck!
Hey Tom! Thanks for your input. I agree with moving it up 500, thats understandable but that 15% completely threw me off! haha Ill be sure follow up with the seller since with a small increase over the standard 1% like you mentioned. Thanks again!
1% is typically the standard here in Phoenix as well but really if you're a cash buyer like you say you are then 15% shouldn't be a big deal, as long as you have an inspection period you can get it back. I would also recommend finding a cash buyer to partner with to put up the money
Hey Dustin, thanks for that advice, that makes complete sense. Definitely need to dig that well first before needing the water, and that is the main reason why that 15% down was an issue. I am still trying to build my cash buyers list. Ill work on that list so that wont be an issue for future deals. Thanks for help!
Hey everyone! Im new to wholesaleing and have been cold calling leads for the past couple of days and came across a seller willing to let the property go for under market value but is requiring a 15% down or EMD at signing. I would appreciate any advice as to how to go around that or how to come up with that EMD. I am willing to connect and bring in a partner that would take over and just let me tag along the ride for experience with no assignment fee. Thanks in advance!
If the seller is asking you for such a large EMD, it is because the trust isn't there. He might be (probably is) thinking you will not fulfill your promise to buy. You need to have/build stronger rapport with the seller and speak from confidence of this being a normal thing you do (buying off market properties).
You want to say something like "Hey MR./MRS. BUYER, putting $15% down is unusually high... I buy 5-10 homes a month and the typical amount I put down is $500. I can put $1,000 to make you feel more comfortable but at 15% it would not make sense for me to tie up that much money, especially if I am closing quick with all cash."
You can follow up with "Imagine if I put 15% down on all my properties, I would have so much money tied up and it would hold me and my partners back from buying other houses. Your house is not the only one we are looking to buy this month. So let's do the $1,000 and get everything moving."
Hey Ramandeep, Thanks for that advice! Your completely right, it did come down to trust. Looks like the seller had multiple cash agreements fall threw and was in no rush to sell too. Ill definitely make to to follow up though!
3% EMD is standard here in So Cal (at least for MLS listed deals). 15% is a lot to ask so I would have to question why seller wants so much. Perhaps it is how you came across or perhaps the seller is unreasonable. Either way, everything is negotiable.
Regardless of the EMD, you should have a true and proven cash buyer already in hand for this deal, that way, you can use your cash buyer's money for the EMD and put them on the contract direct with an agreement for your fee. Sounds like you put the cart before the horse and found a deal before you found a real cash buyer.
Moderator note: Solicitations & deal making is only allowed in the marketplace forums, please refrain from deal making, requests for contact, or any other solicitation in this thread. For your reference, here are the forum rules: https://www.biggerpockets.com/...
Hey Will, thanks for your advice! It looks like the seller had many fallen through cash agreements and was in no rush to sell. But you hit that on the nose, I still have not built a solid buyers list but will definitely get on that asap. Thanks again!
My first thought is that they are not motivated; their defense is up from bad experiences from their past. Or they got a little bird in their ears telling them ridiculous things like ask for 15% down for off-market properties. Either way, as many have stated above, dig deeper, ask them why they are looking for 15% down, and explain to them as @Will Barnard did; tieing up my cash like that is not a good investment for me. Also, to answer your question, the end buyer pays the EMD. Just make sure it's reasonable. No real investor will put 15% down unless it's a fantastic deal. EMD is not a big deal because it's going to the title company anyways; get you a buyer and make sure that they agree to the EMD, and submit the EMD to the title 48 hours after being under contract. Trust me, and if they don't cancel the contract with them. Best of luck
Hey everyone! Im new to wholesaleing and have been cold calling leads for the past couple of days and came across a seller willing to let the property go for under market value but is requiring a 15% down or EMD at signing. I would appreciate any advice as to how to go around that or how to come up with that EMD. I am willing to connect and bring in a partner that would take over and just let me tag along the ride for experience with no assignment fee. Thanks in advance!
Hi Daniel, I can help with EMD or any double closing transaction for any future deals. Message me anytime.