View all Local Real Estate forums. General Real Estate Investing 13 Replies. Quick question, lately I've been trying to put offers in on props that are on the MLS and the agent that I've been working with keeps insisting that I need earnest money and proof of funds. So I told him just to contact the listing agent via email and put in offers that way in order to skirt that issue. Now my question is, if I get an offer accepted do I just write up an agreement with my end buyer for my wholesale fee or do I get it under contract and approach my buyers that way?

And if you say get it under contract what do I do about the EMD and POF issue? As a RE Agent I have never had a client of mine ever accept an offer without earnest money. Proof of funds isn't totally necessary as long as you have a pre-qual letter. It seems you are talking about wholesaling, which from my understanding wouldn't be done on MLS homes However there are people that do wholesale properties that they find on the MLS I'm just not sure how they go about it.

I know that there has to be someone on BP that can help me with this. Agents don't accept an email that says "we offer An offer is a signed purchase agreement detailing all the conditions. The agent's job is to Not let someone tie up the property for a low ball price, with the only chance of actually closing being that the "buyer" can then resell it for a higher price.

Find motivated sellers off market. Ive done about a dozen where I located a deal for a new rehabber who agreed to pay me a fee, for finding the deal and running the numbers to make sure it was a deal, typically got paid 2, to find such deals. In this case you have to be much better at finding and evaluating possible deals then the guy "buying" from you and you need a high trust factor from both parties.

You may be referring to the people who tout somewhat convoluted stuff like creating an llc, making the offers in the name of an llc, then having a "buyer" buy the llc from you and he closes on the deal with his money. This is convoluted enough to make a seasoned guys heads spin, let alone a newbie without money to put down But it sounds easy when the "gurus" are selling it.

You say people are doing it, I would suggest the next time you find one of those guys doing it, spend some time with them find out if they are actually, and if they are how, if that's what you want to learn.

Realize the things a lot of people say can be done theoretically, but in practice is a real pain in the rear and no Realtor wants to work with you.

I have taken enough boot camps in the past and spend enough money on the gurus promoting no money down easy money creative finance deals. I have also learned that when you start asking them real questions about the details they would rather not talk about them. Dell Schlabach, BenchMark Properties That is very helpful. So did you put up the earnest money in the second scenario that you mention?

In California you generally have I think 2 or 3 days to make the earnest money deposit. What I used to do is write in the contract that the earnest money will be wired to the Buyers title company within 3 days. It generally takes a few days to receive an email from the title company as to the wiring instructions and then you have a few days to wire money.

B Earnest Money Deposit (08/21/)

If my offer is accepted on Friday I generally have until next Friday to get the money to them because of this and I usually would have the property sold off over the weekend so I have the funds from my buyer ready to send them. If you are prepared you can do it but it takes having all your ducks in a row and being ready to have an offer accepted. This is exactly what you do. That's just how it is so no skirting the issue, anything less raises red flags with a listing agent and a experienced listing agent would probably blow you off.

SO this is what you do. Both your names on the purchase agreement. Put the investors name first on the purchase agreement AKA offer and your's second. When your offer is accepted and you open escrow and after you remove your inspection contingency ask escrow to addendum you off the purchase agreement and enter a agreed amount professional fee finders fee to be paid through escrow. This is like show up to a formal party in a nice suite but you're wearing worn out sandals.

Glossary

By putting both your names on the purchase agreement you are protecting both your interest in the purchase. So you don't get screwed out of your fee. Have your agreed fee up front with your investor before you write the offer and put it in writing. Then what you are doing is trading your ownership interest in the property for a fee and escrow can do this by a simple 1 page addendum signed by you and the investor. Lance Pualani I did not put up the earnest money in the second scenario.

I did that technique almost identical on one deal sort of by accident because we decided to change how it was titled, last minute. I recall thinking, hmmm here is an easy technique, if you have a buyer lined up.

I have been studying the subject for a year - books, YouTube, courses, etc. At the end of each of these sources I have had more questions than I started with. Wholesaling is extremely complicated and difficult, especially without real estate and business acumen. Every state is different, every deal is different and the work itself is hefty. If you have no money to start out with, offer to give that person a small portion of your first deal to help you get through you through it and see what you think about wholesaling then.

Try your local Real Estate Investment Association to find a mentor REIA. Don't give up - just take your time and be smart about it - Laurie. First of all earnest money is not a legal requirement and if an agent took blowing my offers off without presenting them without written instructions from the seller to do that, they would find themselves at the real estate commissioners office explaining their failure to present.

And several have, and the state taught them the law. In one case of mine a fine when the agent wouldn't believe they didn't have the right to do that, and in another case a one year suspension when the agent told me to get lost and didn't care what the law was.. An offer to buy is legal as long as it is in writing and there is a promise for a promise, in this case the promise to buy versus the promise to sell. The seller can instruct the listing agent not to present certain offers in writing but that agent would be wise to keep a copy to show buyers or their agent.

I do use earnest money in my offers when needed but the contract calls for it to be deposited into escrow within 3 business days after acceptance. There is no check clipped to the purchase offer. No seller or agent to fight with to get it back if offer is not accepted. As far as I'm concerned a proof of funds letter is worthless unless the buyer has a current one from a bank covered by accounts belonging to him. And an agent should be aware of it. A proof of funds letter doesn't guarantee that funds will be issued on behalf of the buyer and as we know companies that will issue such letters are a dime a dozen.

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Lance Pualani Flooring Contractor from Round Rock, Texas posted over 3 years ago. Thanks in advance for any constructive help. Brie Schmidt Investor, Broker, and Public Speaker from Chicago, Illinois replied over 3 years ago Moderator.

Lance Pualani Flooring Contractor from Round Rock, Texas replied over 3 years ago. Wayne Brooks Real Estate Professional from West Palm Beach, Florida replied over 3 years ago. Dell Schlabach Investor from Canton-Akron, Ohio replied over 3 years ago. I have wholesaled properties of the mls, but I have 1. Either closed on the property first with my money, or 2.

Good luck in your real estate endeavors. Steven Stokes Wholesaler from San Francisco , California replied over 3 years ago. I hope this helps and good luck: Ed Wood Real Estate Broker from Orange, California replied over 3 years ago.

Lance Pualani This is exactly what you do. Why do you do it this way??

Earnest Money: Copy of a Check or Proof Of Funds? - Searchlight Crusade

Aaron Wall from Crawfordsville, Indiana replied over 3 years ago. Thank you so much Steve and Ed this is exactly what I needed to know. Ed Woods recommendation is the ultimate technique, he could make money as a wholesaling guru. Alexandra King Home Stager from Santa Barbara, California replied over 3 years ago.

Hi Lance, Dell, Dell:: Wholesaler from Salt Lake City, Utah replied over 3 years ago. Trending Discussions Failure to launch, no luck so far Replies.

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