Sent in an offer, it was rejected, the agent said that if I put in another offer I must mention how much I will put down…
The agents says the bank will not enter into contract with me unless I put down 5%…
They also said that I must obtain a 203k loan…
Can someone tell me what the heck is going on…
Did you put that were going to pay cash?
In the offer she shouldnt put that your are getting a loan and that it will be cash.
Sounds like the agents thinks you are going through traditional financing and the 203k is a loan that they give you to rehab a house.
I think usually its when the house has missing mechanical and/or appliances.
Thats all I know…sure someone else will shed more light on it.
No I didnt… and your right, the house was missing quite a few things, but how do you get around the fact that they want 5%… The idea is for me to get it under contract for one price then sell it to my cash buyer for another price…
I have never had this happen to me.
Are you going directly to the listing agent?
Or are you working with an agent?
You need to tell the agent that you are using a private investor to fund your deal and that you will put 2k-3k EMD.
Maybe they are not understanding what you are tyring to accomplish.
Tell them you are an investor looking to rehab/flip. Dont tell them you want to wholesale.
I can’t tell if it’s the reo agents proposing these or if the banks are demanding it.Either way it’s getting pretty common I just had 2 put 10% on one and sign a pile of documents along with no assignment page.New problems to solve.Always something,these banks should be happy to work with us,we’re trying to pick the market up and get these houses back up to value.
As I scour the MLS in my neck of the woods I’m finding the REOs that state you need either $2500 or 5% - 10% whichever is higher! It is bumming me out :banghead I was told my another investor that it is the listing agent putting those stipulations in there to weed out people.
You can always find wholesale deals through signs, ads, radio, flyers, calling private sellers in the paper, or by finding fsbo’s, or driving around looking for ugly vacant houses. If the real estate agents don’t want to play your game you have other options. Don’t give up. I wholesale 10 houses a year and have never wholesaled a deal through an agent because i went through the same issues.
It is not uncommon for a bank to require a certain percentage to be put up for earnest money. You can always counter back with a lower amount. It’s all part of the negotiation process.
If they won’t budge, move on to the next one.
Steph :cool
The problem here is your agent thinks you are getting conventional financing. All you have to do is tell her that it’s a hard money contract and she’ll almost 90 percent know what to do from that point.
I wouldn’t offer more than $1000 EMD as you will have to get that $1000 from your end buyer. $1000 is enough skin in the game for a deal. There’s no one property you have to have.
Matter of fact it may be best if you don’t have any money to get aquainted with wholesaling other wholesalers deals to your buyers list. This is something I am doing to generate money to be more involved in making my own REO offers. I like it better this way and I don’t have to tie up an agents time knowing that I don’t have any EMD to put up if no one wants the house in 5 days or less!
You can wholesale other wholesalers deals with lint in your pocket, and you won’t be up under earnest money pressure, nor do you have to deal with realtors. This also gives you a large inventory of houses to provide your investors with.
I’d say flip a couple of wholesalers deals, get your money and then venture into making offers on the REO houses with an agent. This way you can step into the game correctly and you will know where your earnest money is coming from off the top. As long as you know what your investors want and you structure your offers properly you won’t have to worry much about losing your EMD. If you really want a lot of cushion so that you don’t lose your EMD then make offers on HUD homes because if you get a deal accepted you will have 60 days to close. Even if you did lose your EMD in the worst scenario are you going stop investing? NO!
It’s hard(not impossible) to flip an REO in 3-5 days max because you don’t have any earnest money and you’re expecting your investors to buy the house in that short time frame. In my experience I have not seen a scenario where the bank will allow you to put up your EMD after the inspection period. Each time I’ve tried that, the realtor always advises me against it, or the bank crosses it out.
The longest amount of time that I would say you could possibly get within reason from my understanding of the Standard Realtor Contract is contained within the clause that states “The earnest money shall be deposited in the HOLDERS escrow account within 5 banking days”. You can request that the EMD be HELD by your Buyers agent, which would enable you to not put the money up until 5 days from contract ratification. I think this is feasible, but even in this scenario by tradition the listing agent, or the closing attorney is the normal HOLDER of the earnest money. However I believe if you call them on this clause in the contract, they may have to honor it.
There are times when you send out an email blast to your list, some people don’t even get back to you until about 3 or 4 days. Not to say that you had a bad deal, but you have to understand that some of these people are busy, some don’t even check email that much, some may have stopped buying, or whatever the scenario. By that point you don’t have any leverage and the agents are wondering where your EMD is.
I tell you this because I’ve had it happen to me, so I know from experience what I’m saying in regard to this.
Fantastic stuff bashir…I appreciate your response, and I understand, thanks again…
Thank you all for your responses, I am now looking into other wholesalers deals, and I will negotiate the banks down to the EMD that I can put up (unless I know I have a buyer)…Thanks Guys!