Backing out?!

In a wholesale deal, what if our buyer backs out of the deal right before the closing date? For instance, if we had our clause in the contract that buys us time and due diligence, and we find our buyer, however, right before closing they back out. What happens to the deal? Do we still get stuck with property?

If you can’t close on it yourself, you can try to get an extension. If the seller doesn’t agree, you will lose your deposit, and the deal. That’s why it’s important to have your own financing lined up, so if your buyers ca’t close, then you can.

Your buyers are a lot less likely to back out if you get a sizable deposit from them, btw.

Steph :cool

This is why you control your deals from beginning to end. As a wholesaler it means having someone who will finance your BUYERs (as well as yourself). You find a deal, great! You find an investor/purchaser, perfect! You have private lenders/local banks/HMLs, etc. on your team, essential. You take your investor/purchaser (via your assignment contract) to YOUR team of lenders! Control your deals helps you get paid!


To avoid this situation in whole I put into my contract with the seller that my earnest / deposit $ will be provided at the satisfaction or expiration of all contingencies. In this situation if I have not lined up a buyer, or intend to close it myself by the time all contingencies are satisfied or have thusly expired I simply back out of th e transaction using the out clauses I have built into the deal from the start.