Those of you who work with Realtors...have you ever tried this...

I tell ya Rich...deals are everywhere right now. If the seller is not willing to give a few more days then you may want to consider backing out of the deal using your bail out clauses. When working with FSBO's I always stay in control of how many days and earnest money. There are so so many FSBO's you can be picky right now in this market. If you contract states that you can walk away if the inspection does not pass then...it should also say that you get your money back without penality. Read the contract carefully and find these bailout clauses.

Sistreat,

I hear what you are saying. I am not going to try and convinve myself that it needs to happen. I have not signed anything yet. I will talk with my agent and go over the contract in great detail tomorrow. If (for this deal) I am only able to have 10 days then all I need is one. I will see if my buyer (when I lock up the property) wants it. I will give the address to him and let him do his thing for 2 days. If he doesn't want to sign a contract with me by the 7th day then that is it. It did not pass and I will back out of the deal. I am motivated, I am desperate, but I am not playing in Vegas here. The odds are looking like they're on the side of house and that is not how I play. Lesson learned. Thank you and I will need to be a lot more confident and firm in what I need. Again thank you. I think that I am getting too focused on trying to make a deal happen than actually having a great deal fall into place. As I said before....it is still a step foward. Time for another.

Richard
Bothell, WA

So I have another question...go figure. I just got the copy of the contract from my agent on the property I want to lock up. I understand....well not much other than what is in simple language. My agent is going to go over it with me line by line tonight. It says I have 3 days to get my earnest money back without penalty, and a 10 day inspection period. Not great, but I will not make that mistake again.

The question (assuming I locked up the property,) if my buyer wants to buy it from me do I do another "purchase and sale" contract with him, exactly like I did to lock up the property just with the different price now and between the buyer and myself? Is there a release of obligation form I need also, and if so where can I get at least a copy of one to work to my own? I would get earnest money from him, would I just trade his check for mine with my agent right away so I know my check won't get cashed? Lastly how do I introduce him to the original seller and let them know what happened, or does my agent do that?

So that was more than just "another question." Sorry. I do have to admit I am freaked out by this. I have never purchased property, ever. Let alone put in an offer before. I want to make sure I am doing this as correctly as possible. I know things happen. I will deal with that as they come. I just want to know that I have at least a good foundation on each deal I do. Any help will be greatly appreciated and useful.

Richard
Bothell, WA

The agent, in most cases, should be charging a non-refundable fee for faciliating the transaction but many do not do this. They are so used to working for free that this is a commonly missed mistake on their part. A savvy realtor will charge $500 up front and receive a commission that is agreed to when the sale is finalized. What I have done in the past is credit back that $500 dollars when the commission is paid - but generally the options are never excercised!

I hope that this information helps!

Here is a suggestion that helped me have a signed purchase agreement for my first deal. When I put in my offer I did put down a $500 Earnest Money Deposit, but I did not have Cash or approved financing at the time.

The day I signed the contract I had 14 business days to find financing, cash, or back out of the deal. Now I did have a helpful Realtor to get this idea accepted. All you have to do is explain to the listing agent that your bank will not give a pre-approval letter unless there is an accepted purchase agreement. I know this is not the case at most banks or mortgage brokers, but it is the case at my credit union.

So here is the thing to do. Just have either your Buying Agent or the Listing Agent put in the contract that the Earnest money Deposit and Letter Of approval or Proof of Funds will be submitted 3 days after the 14 Business Day Inspection Period. This gives you the necessary time to find your end buyer! If you do not find an End Buyer in 10 calendar days, back out of the contract and move on to the next deal.

This may seem like a hard thing to convince the seller to sign off on, but it is only hard if you think it is.

There is a very helpful book to read titled "How to Have Confidence and Power in dealing with people" by Les Giblin.

In this book there is a very important method on how to get people to help you in your situations, by asking them for their advice, not their help.

Here is what you can do, instead of asking the Listing Agent (this usually works better when you are talking directly to the sellers representative, instead of having your agent play the phone game and not say it exactly as it needs to be said)

"Would you take an offer to the seller with the following terms, 14 business day inspection period with earnest money and Proof of Funds to be submitted 3 days after inspection period?"

The agent would likely think to themselves, "no I will not accept an offer without an earnest money deposit or proof of funds because I know that other buyers have earnest money and proof of funds!"

Ask them this,

"here is my situation, I have a few other deals going on right now and before I know I can commit my financing (or cash to this deal) I need to know that the property is something I know I want to move forward with, do you know of any ways to go about doing this? Can the Proof of Funds and Earnest Money Deposit be submitted a the end of the Inspection period?"

Check out page 122 of this book and you will see what I am talking about!

Thank you Mr. James Greer. I appreciate the information. I have realized through this deal that is exactly what I need to do. It is my offer. My terms. Whether they want to accept or not is theirs. If we meet somewhere and come to an agreement then great, but if not then move on to the next. I was getting way ahead of myself on this becaue it is the first time I have seen a contract with my name on it, etc. I needed to step back for a minute and get information. Then I am able to breathe again. So thank you and I do intend on checking on that book. I wish you the best in your endevors and will look forward to hearing on your future deals coming.

Richard,
Bothell, WA

I'v been working with a realtor about a week, i do have one bid in.
Twice now i have wanted to put a bid in on a property and she tells me that im just wasting my time that she knows that the bid would not be excepted.
one of the properties is an REO and i told her i wanted to bid on it, she again tells me im wasting my time because this property has 6 bids in now and that i am working with a contingent, not a cash buyer, that i have to rely on my end buyers.
Is this reason not to put my bid in,am i wasting my time with her or should I listen to what she has to say.
What can i say to her when she tells me im just wasting my time.

P.S.
she will put the bids in for me if i realy want to but she gives me all kinda reason why i should not.

Ted

Hello,

I have an assignment-savvy REA on fire to work with me and will be getting together with her on Monday to discuss the financial arrangement of our working relationship. I'm assuming I will be paying her a percentage of my assignment fee as her commission but have no idea what that percentage should be. Is there a standard percentage for this?

Thank you,

Colleen

I would not pay her any of the assignment fee. She can make her money off the commission she gets being your buyers agent, Usually around 3% paid by the sellers agent or seller.When you actually close on the deal.

Hope this helps,
Michael Mangham
MD Home Acquisitions LLC

HOW CAN YOU EXPECT TO TIE UP PROPERTY WITHOUT EVEN BEING ABLE TO CASH FLOW A 1K EARNEST MONEY DEPOSIT. BLOWS MY MIND.

Yes, thanks, Michael, that does help, but I'm still a little confused about the real estate agent's role in an assignment situation and which buyer we're talking about. Me as the buyer of the original contract? Or the investor I assign the contract to who is the new buyer? I'm also not clear on how this works for the agent if I close on a property that she wasn't the listing agent for. I realize these are real estate 101 questions, but I can't seem to find the answers in the mountains of information I have.

Thanks so much for your help,

Colleen Childers

Hi Colleen,

I remember having those exact questions about a year ago. I will try to make this understandable, but the FIRST deal you work on you will learn so much its hard to believe! So don't sit on the side lines, get out there and learn! OK, here goes.(this applies when you are working with an agent, not directly with the seller)A very simplified version starts with:
1. You find a property you like, that has good numbers etc.
2. You submit the offer with your agent, contract must be assignable.
3. Sellers accepts your offer.
4. You assign your contract to your buyer for a fee using a separate assignment contract.
5. Both contracts go to the title company and your buyer pays the seller and your assignment fee. You leave with a check.
6.Seller pays agents commissions unless negotiated otherwise.
Your agent gets paid commission from the sellers agent, not you. That's it the deal is done. Remember you do not close on the property, your buyer does. You have assigned him your existing contract and all of its terms including how your agent gets paid. Your buyer does not care because the seller pays
the commissions.

BRYANWMITCHELL

Don't let your mind be blown, learn ALL the strategies that are available that allow you to make money in real estate investing!
I personally have made over $20,000 in the last 2 months doing deals that I
did not spend one penny of my own money! I have done multiple deals that I did have to put up earnest but that was for a different strategy. Its great you joined the DG website, there are people on here that use no money down and have made many times over what I have! Read. learn and ask questions!
Also, Dean has his success academy available, Priceless education!

Hope this helps and good luck investing!
Michael Mangham
MD Home Acquisitions LLC

Thank you, Michael. That makes it crystal clear for me. I signed up for the success academy less than 2 weeks ago, found an agent, found a mortgage broker, title company and real estate attorney, have gotten responses to my 877 number voicemail scripts, found out through word-of-mouth who the real players are in my area and have several of them on board now, and have offers on 2 FSBOs in neighborhoods I already knew had an unusually high number of distressed properties, even in this market. One of the phrases that jumped off a page somewhere at me was, "The only way to make money at this is to make offers." And that is something you have to make happen. Failure isn't possible simply because I've decided I'm going to succeed. To that end, I have my subconscious mind programmed for success with 3 layers of redundancy. lol I say not knowing what your subconscious mind is doing is like having a teenager you never check up on. Anyway, even for someone as hopelessly academic as myself, there is no possible way to learn everything in 2 weeks, so my approach has been to trust in my ability to sort through the information and figure out what is absolutely essential to know in order to get my first deal accomplished. It isn't about taking shortcuts, it's about having a strategy to keep myself from becoming overwhelmed. That approach was working beautifully for me until I just couldn't seem to find a direct answer to the questions I presented. Thanks for clearing the fog for me. I think I'm back on track again.

I am currently working on an offer on a foreclosure, log home with over 2000 sq ft, 4 br 2 ba, swimming pool, on 3,5 acres. Needs repairs on it but the after repair value will be around 200,000 with repairs coming in at around 40,000 and an asking price of 47,500 and a tenant buyer in place that wants the property. The bank that is foreclosing on the property requires a 1,000 em deposit and told the selling agent that I would make the earnest money payment when my offer is accepted giving me time to worry about that part and this was accepted. I am currently working with a local bank pertaining to the financing part as owner financing or such is not possible with this property. Positive cash flow for this property would be around 200 a month and the tenant buyer buys the property from me with in five years. My offer on the property is 27,500 to see if it gets accepted because other offers have been made waiting on counter offer but nothing has been said and the property will be going up for auction soon since it is a small local credit union that has the property. My tenant buyer said he would be willing to pay in as is condition 40,000 so I am trying to get the bank down to 30,000 to make a good profit on the selling price and then on the monthly cash flow as well for doing the deal til my tenant buyer buys the property.

Shawn

I am planning to be making offers but I am still not clear of the best way to go. Currently, I don't have a broker that I work with it. Will faxing offers to a RE agent/broker be acceptable or does the agent want to know more about my abilities to fulfil the contract.

I am struck by the fact that you have been successful at putting offers without any money being put out. You help is needed.

Thanks

I have lost on so far the only 2 deals i had a contract on because the sellers agent demanded a $1,000 deposit with the contract.
I had signed the contract, my agent sent it to the sellers agent and it stoped there with out the $1,000 deposit.
Can you do a deal with out money, Yes you can it goes on everyday.
But you will find the ones were people will not corporate, the nature of the beast.

Am in Florida- one of 3 toughest states for real estate laws in US. A REALTOR since 1982/appraiser since 2002 - seen it all. I may legally make every offer on my property listings and for any buyer I may represent - BUT - we are transactional agents and owe both parties honesty. That puts a burden on us. When most of us see $100 we know what we are dealing with. Every "real estate Guru" in the past has advocated "using real estate agents for information" and "no money down buying".

DG is the first that says to get a good REALTOR and keep them!

Florida laws cover the area of persons "flipping property" - not take title to it - before reselling. There are laws about representing other people in a position of a real estate agent in buying and selling any property. Read the laws to be sure you are not going to create issues for yourself.

"Know the law and the legal way to break it" - anonymous author

God Bless!
ademarco1

Florida law- illegal to post date checks -must have funds day of writing.

Here is another escape clause you can use in connection with EMD. Get NCND from your buyer first as "partner". Have escape clause predicated on your "partner" seeing and approving of the property. EMD due 10 days after "partner" accepts it and gets approved inspection. This will also assist in the closing - you are not flipping as partner (stipulated only until closing and with NO obligations on either party for anything other than that single purpose - ask attorney). GET EVERYTHING IN WRITING -LEAVE NOTHING VERBAL. If it is not written it is NOT enforceable in Florida - good advice anywhere!

Hope it helps someone!
God Bless!

ademarco1
Realtor/appraiser

If you have a real buyer - something I did in South Florida- had them put EMD with title company or attorney. REAL buyers will even want it with their closing attorney- fine - get everything in writing. If they bought with me - all went to closing costs. If they skipped to another agent OR circumvented- I got set amount out of the EMD for my work "bird dogging". No reason we can't get that from investors here too!

Hope it helps someone!
God Bless!

ademarco1
Realtor/appraiser

Posts have been helpfull and thought provoking! Hope to be able to contribute in the future, Semper Fi D-LO

If your not willing to put up earnest money, then what you are saying is that you have no confidence in yourself to follow threw or complete the deal.

I see some many questions of how to get out of a deal, I can't believe you people want or have the ability to really become Real Estate Investors.

You are going to injure some ones self esteem! Frustration setting in? Don't give up, you are dealing with the 90/10 rule. 90% of people are good little worker bees,they will never be real estate investors, 10% are go getters. Many will never attain the ability to find a real deal and put it under contract, instead they worry about exit clauses! We need to give back to others but we can only do so much.

Talk to you soon James,

Michael Mangham
MD Home Acquisitions LLC

You guys are awesome, Mike glad to work with you! You have so much drive and vision and really care about people. James I get the same vibe from you. I like that both of you tell people how it is. Again Mike thanks for everything you have done for me with these deals! I can honestly say to anyone on this site that you need to open your ears when these two guys speak!! Go make some deals!

GREAT INFO....THANX for sharing.

RIGHT ON Jason! THANX for sharing!

THANX for sharing Aaron....you are right on the money!

Don't count on that! First off, writing a "post-dated check" is illegal (even though we all know it's done almost every day and is an accepted transaction, even banks and large co.'s do it) and secondly, if the check slips through, it happens, take it from someone who knows (not re. a large sum of $$$) but if it gets through via error, inattentiveness, intentional.....whatever, if the funds are there it's OK, but if they're not there may be some inconvenience, embarassment and possibly additional expenses.....and the bank will tell you that you should not be writing post-dated checks.
Some of the other posts here are very informative, a better way to do it AND they work...learn from the "experienced."

Great post Al, thanx for sharing this info.

Thanx for the input. These co's are called/provide what is known as "Transactional Funding." There are a TON of them out there....Be Careful, look for ones that have been around for a while (established w/a track record), Compare several co's and ALWAYS READ THE FINE PRINT!

From what I have read, the rule is actually the 99/1 rule. You're being awfully generous calling it a 90/10 rule. Folks, escape clauses only work for the short term as you can't keep fooling people with your lack of commitment. As a seller, I'd never take a property off the market with an offer with indeterminate weasel escape clause. Escape clause to bank loan commitment is normal, escape clause to home inspection is normal, but escape clause to partner's approval gets 3 days and I am not taking the property out of the marketing rotation for that type of clause.

Always look at a deal from the perspective of the other party. To do so increases your chance of making a deal that benefits you in the long run.

BTW, I've done deals where I have put down $10 and it works, but I can follw through on the purchase of the home and that is what really counts.