OfflineHey everyone! I just have a quick question. I have been working with my realtor and i have found a great property that i want to make an offer on. I told her i was ready to make an offer on the property and what i was willing to pay do to my comps of the area. here is what she wrote back:
I need a couple of pieces of info from you:
$1000 Earnest Money okay? Would like this to be in cash form if at all possible.
$26,500 in cash at closing?
Inspections? If yes, whole house, radon, termite? Buyer pays for these.
Just let me know so that I can finish up the offer.
I dont have any money for an earnest money deposit and i was wondering what inspections i should have her put in the contract and if there was anything else i needed. Sorry guys i know this is probably redundant but i am just trying to get my first offer out there. thanks!
I'm glad to hear that you're taking some action. Let's see if I can give you a couple of things to consider.
1. Earnest Money is required on a deal to solidify the offer. It's called consideration. In the old days you could give cows, chickens or any thing of value as consideration. Now days it's mostly cash that is used as Earnest Money. Now then as for your agent saying $1,000 that's their opinion. You can place any amount down as EM that you want. It could be $10, $250, or any other amount. If the property you are talking about is only $26k then $250-$500 should be just fine. You can also just go with $100 if that works for you. If you don't have any money you can borrow it from a friend or family member but you will need something. It is possible to simply use a promissory note as consideration also. You will want to consult with a realtor or a real estate attorney to make sure this can be done.
2. The other thing I want to mention is about inspections. If you will be wholesaling your properties. You will not need to do any inspections. Your end buyer will do whatever inspections they want before they buy. All you need to do is estimate what the rehab will be so that you can make an offer. Once your offer is accepted you will pass that info on to your buyers and they will determine what they want to do with the house. There's no need for you to go to that expense.
Good luck and remember to ask lots of questions.
Chris
"Faith is the eternal elixir which gives life, power, and action to the impulse of thought.
"Faith is the starting point of all accumulation of riches!"
- Napoleon Hill, Think and Grow Rich