Hey everyone.
I was talking to a guy that does “alot” of real estate. And he told me if I did wholesale, that when I made an offer to the seller, it would cost me money.
Is that true???
-Jack
the answer is yes and no. You will have to put up a earnest money deposit regardless of whether you are dealing with a private seller or a bank. With a seller, earnest money can technically be as little as a dollar. I normally make it ten to twenty bucks which goes into escrow never with the seller. With banks and relators though, you will have to put up at least a thousand dollars or the percentage of the price. So if you are going to be doing REO’s you better make sure you have at least a grand to put in escrow for every contract that is accepted. Also you better have decent buyer’ list or know another wholesaler who does so you won’t lose you money if you can’t close.
Thanks. But what I was asking was, if I call the seller and make an offer, will it cost me money to make that offer, whether he accepts or declines?
Thats what this guy was saying.
We have no idea what your friend said. All we know is what you heard, which is not the same thing as what he said. You got a good answer here and apparently didn’t hear it.
You can make all the verbal offers you want and they are totally free, but a verbal offer is worth the paper it’s printed on. Doesn’t mean anything at all until you put it in writing (in the form of a purchase contract) and put up some money.
Without knowing the conversation we are clueless. But to me, it seems your friend was implying that by making an offer first you are going to cost yourself money in that the seller would likely be willing to accept less than what you offered. I’d be curious to see what someone with excellent negotiating skills would say about this.
it is good if the other party puts a ‘price’ on the table, but its not necessarily negative if you make the offer first, a great negotiation is when both parties feel that got the better of the other,if your good the person your working with should feel a winner, even if you got everything you wanted
I negotiated contracts that would at times take a couple of years to put together,the psychology involved in fun
andy
Oh he means will he lose money as in not get the best price? shrug
In that case, I always try to get them to tell me what they want for the house before I go blurting out an offer.
I don’t understand why would it cost you money.This is just a scenario that you would call him and he ll have to bid on the property.