So is the Earnest Money Deposit that the buyer gives to the title company going to be the check that covers my EMD with the bank+finders fee?
ex.
say i have under contract with the banker for 50k for a house do i sell the house to the buyer for 50k and tell him he needs a to give the title company a check before closing for 10k more for EMD+finders fee, is that how it works or is the finders fee going to be seprate from the title company? ? is this only for double closing or for quit claim strat. as well??
this is so confusing!! how am i supposed to know all this?
In the case of a double close- there will be two separate contracts- one between you and the bank, and then one between you and your buyer. If you are buying from the bank @ 50k and selling to your buyer @ 60k, then you will get your 10k profit (minus closing costs) once the deal is closed.
You will have to put up an EMD with the bank once the contracts are ratified. I usually offer 1k, and then I get 2k from my buyer. Unless you already have your buyer lined up, you are going to have to come out of pocket for the deposit, so be prepared to do so.
Steph
so when i charge the EMD from my buyer does he write a check to me or does it go to a title company? how does that work? and what would be the contract between me and the buyer have on it? will i have to create it?
would it be easier just to try to do a quit clam?
Jeremy if you are doing the Quit Claim strategy you will NOT be doing a double closing.
You simply have the agent add your buyers name to the contract you have with the bank. Basically 2 people are buying the property in a partnership relationship. You and your buyer will now be listed on the contract you have with the bank.
From that point you do an assignment of contract for whatever your fee is.
At closing you will have a quit claim deed drawn up and you will take your name off the deed and only your buyers name will be on the deed.
It’s a single closing with one P and S agreement.
If you were doing a double closing, then there would be no need for you to put your buyers name on the contract you have with the bank.
Since your buyers name is on the contract you have with the bank he/she should be able to write the check in his name because he will be recognized as a buyer who is on the original contract.
Double check this .
ok i get that, but how do i get the EMD money from my buyer so i dont have to pay for the EMD to the banker, do i just ask for a check to me?
You can ask your buyer to make the check payable to you, but many times they are going to want to have it held in escrow by the title company, especially if they’ve never done business with you before.
Also, be aware that once you have the offer accepted with the bank, there is no guarantee that they are going to let you add someone else’s name to the contract. I have had them tell me no before, and that’s when I started doing simultaneous closings instead.
Steph
So should i ask the bank before hand if they will let me add someone , before getting into a contract? How do i do a simultaneous closing?
If you are asking them to add someone onto the contract before you have an accepted offer, then they are just going to tell you to make the offer with both names on it.
You need to find a title company that is investor friendly. Many title companies will not do simul closes. I found mine by asking for referrals from other active wholesalers.
Steph
but if your buying a reo property from a bank dont they use there title company to close the contract?
what can i do to learn about all this title company stuff?
Or should i just get a buyer agent??
Yes, they will make you use their title co to do the title work.
You can do the actual closing at yours, though.
I just have them email all of the closing documents to my title company along with wiring instructions. I sign all of the paperwork at my title co and then they FedEx the signed docs back to the bank’s title co and wire them the money.
Steph
Wait so if the bank makes you use there title company for REO homes, do i till my buyer to send a check for the EMD to there title company??