I am a newbie to wholesaling and I have never worked with a realtor before. I contacted about 3-5 realtors and they have no clue about wholesaling properties. The last person I called I told her what I was looking and she said she could get the job done. From my readings and research a “Letter of Intent” is what is presented to a realtor when you want to show the seller that you are interested in purchasing their property. I emailed the Letter of Intent to her and she states she has never seen such a form before. She emailed me a 8 page sale of contract stating this is what needs to be signed with the seller to purchase their property. Now from my readings (and I have been reading a lot of books) a purchase and sale agreement is usually 1-2 pages. She says in the state of New Jersey realtors use the 8 page contract.
Can anyone (especially persons from NJ) please tell me if they have used a realtor and what are the forms that are used?
And also what is the process of working with a realtor? The other realtors gave me the same 8 page.
If you know who the seller is go direct and take proof of funds to show the seller you are serious about buying the property. What I think you are trying to do is tie up the property and hope you find a buyer, most sellers will not do that anymore because they will be taking it off marking. Yes 8 pages is standard and the Realtor will ask you to show funds you can buy. Please take the books with a grain of salt and it is best to hire you a mentor.
Hello, I am also a newbie, just getting into wholesaling. I have yet to do my first deal, but I feel like I am close. Here is what I have been doing:
Find a motivated seller: You can use a realtor and find one on the MLS, but in my area, Northern VA, there is too much competition. I am finding them using a direct mail yellow letter campaign, craigslist ads, youtube, flyers, and postcards. Bandit signs are also highly recommended but in my farm areas, they get taken down the next day, even on weekends, so I don’t use them.
Once you find a motivated seller, get the property under an assignable contract. You can use the 8 page version as long as it has all the contingencies you want it to have, and it is assignable. Or look for a simpler version online. Whichever you use, it is always good to find a real estate attorney that works with investors to review it. They should be willing to give you a good rate if they want your future business. I heard Robert Shemin speak recently and he said if a deal looks good, get it under contract with contingencies first, then verify your numbers. I think that is good advice and I plan to use it.
Find a buyer: Ideally, you will have a buyers list before getting your first house under contract. I have found the easiest way to find buyers is to go to REI club meetings and NETWORK.
Make a deal: Once you have a buyer, you assign your purchase contract to them using an assignment contract. I plan to make my assingment contract non-assignable. I will be vetting my buyer to make sure they can close, and I don’t want the buyer to turn around and wholesale to someone else who can’t.
Each of these steps have their own little naunces that if you had a mentor, that person would be able to help you through. I don’t have a mentor, or money for a high priced course, so I am muddling through with info from the internet, forums like this one, and talking with other investors. I hope this helps. And to the more experienced investors, please correct me if I have said anything wrong.
Why bother making it non-assignable at this point? you got your fee as you make your fee or earnest money non-refundable; most take $2k in non-refundable funds to lock up a deal. If they can then wholesale it to someone else, they get a cut but you still get your fee. This can be a good technique to use with fellow experienced wholesalers who often have huge, established buyer’s list. You can make a deal to get your fee and then let them send it to their list to get a buyer quickly.
One of my mentors told me, “Hogs get slaughtered, pigs get fed!” in other words, don’t be greedy. The point is to make money but you don’t have to make all the money on one deal. :biggrin Good luck!
Yeah, I would charge $500-$1000 to take it off the market. If they have a problem with giving you a binder deposit, I would still do a P and S with them, and take to to the attorney to close, but let them know, in the mean time between now and closing, the house is still on the market because you did not put up a binder deposit. Yes we have a contract signed with you but if someone comes with a better offer, you can replace them with that buyer.
They have to understand what the binder deposit actually does. :bobble
My plan is to collect the non-refundable deposit up front and then get the difference at closing. So if the deal does not close, I don’t get paid. If I decide to partner with a more experienced wholesaler, I would probably contract with them separately as opposed to assigning them the contract and giving up all control of the deal.
I guess what I am trying to avoid is the case where a deal gets caught up in a chain of wholesalers, and the price gets inflated to the point where someone is trying to gouge the end buyer and the deal does not close.
Also, I want to make sure the deal closes because that is what I told the homeowner I would try to do.