Earnest money

I hope to get some good help. I have read in books about wholesaling that you can give even $10 for biding contracts, is this some what true?
And if not how much Earnest money does one need to bind contracts to resell to investors. Thank you

Hello moh sin,
Earnest money does not bind contracts , mutual consent with signatures from all parties do though. Common misconception says money must change hands to make a deal. Earnest money doesn’t change hands it goes to Title co.
I use E money with sellers who have bad info, and REQUIRE E money. Still I make it due at closing. Go figure, still legal and binding.

If you are wholesaling then you have already purchased at a huge discount and will have no problem selling your contract, even if you/and seller decide to redeem the E.money to escrow you should put the E. money redemtion far enough out in the contract so that your buyer will pay it. So you now have a bought and sold deal with no money out of pocket. Hence E.money now becomes scribbles on a contract that your buyer will deal with…not you !

   sum sin, Darin

Thanks, I think what i’m trying to ask is do i need earnest money to put properties under contract?

oh sin,
NO and Yes. Refer to previous post. Purchasing through a realtor with no Emoney will be challenging. They are not familiar with no emoney contracts.
The point being, yes on the paper you will have to show you are going to put up emoney but in your case you will be selling the contract/property before YOU need to show the kwaun.

You do not actually have to HAVE the money to put it under contract.
If you do not put up earnest money you still have a contract as long as you perform to the contract the way it is stated. You make the contract, and in it you say " $5000 emoney to be deposited at closing" Well closing could be 60 days away…that will give you enogh time to sell the property/contract and YOUR buyer will put up 5k emoney in escrow because you will require it in your contract with your buyer.
So effectively you have NO emoney in the deal.
And yes contracts are still legal without emoney.
Hope this helps , let me know, sum sin, Darin

damn your good thanks alot i really appriciate it.
oh yea what is kwaun

Rent the movie Jerry Mcguire, you will love it.
:director Show Me The Kwaun ! Darin

Thanks alot I never saw that movie but i heard its pretty good take care chat later. bye

Another viable way that even works with realtors is to Make the earnest money due upon the release of a certain contingency in the purchase agreement.

I use and have clients that have used “Earnest money to be paid after the release of the 10 day inspection contingency” in that 10 days you get your buyers through, if the like the home then collect non-refundable deposoit money from them, and use it as your earnest money when you move forward with the contract, if they dont like it then back out of the contract, and you never wrote a check anyway.

Good point Eric,

If I have a suspicious buyer or they want unrealistic demands at purchase ,I require them to release the emoney. In some cases it made the deal stick. In others I still have emoney in escrow from buyers who bailed/breached contract and didn’t make the purchase.