OfflineHello everyone.
What ends up happening if the end buyer fails to sign/show up at a double closing? Will the wholesaler face the burden of paying the purchase price even if a Purchase and Sale agreement is made between 1) the seller and wholesaler and 2) the wholesaler and end-buyer?
This is assuming that the end-buyer had not given any written notice of canceling the contract with the wholesaler prior to closing escrow.
Best,
Larry
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In a double close when you are using transactional money the transactional lender will not transfer funds until the end buyer has put all the purchase price money in escrow. If the end buyer does not show the deal does not happen, and any earnest money put down will be lost by both parties, the middle investors and the end buyer. Make sure you collect more earnest money then you put down and you should not loose any money. I have never heard of this happening, but it could be possible.
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What would happen is you (as the wholesaler) would lose your earnest money deposit and so would your buyer.
To prevent this make sure you collect a substantial non refundable earnest money check from your buyer when they sign the contract with you. They will perform or lose the earnest. You will have enough money to cover your earnest money and won't lose a dime.
Good Luck,
Michael
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
I read all the comments and learned something about EARNEST MONEY, thank you all for your good advice and SPECIALLY NOT LOOSING MONEY. Have a great day.
Thank you Michael and eroberts for this knowledge! Bottom line: collect more earnest money from the end buyer than what I would pay the seller.
Thank you so much.
Best,
Larry