If i made an offer on a property. used a funding letter, offer was accepted. But cannot locate a buyer? Is the contract between myself and the seller null and void. Do i need an exscape clause in the contract. how do i escape out of the contract, if i cannot find a buyer?
Did you add an inspection clause or any other clause to your contract? What have you done to try to find a buyer?
If you made the contract contingent on getting financing, you can probably get out, since the transactional funder won’t fund if you don’t have an end buyer. If you didn’t use a financing contingency, you’re probably SOL.
Always add an inspection clause to your contracts! This is pretty much the default investors escape clause.
Otherwise you can simply tell the seller what happened and he may let you out of the contract and give you back your deposit but it would be his right to take it. If you are dealing with motivated sellers though you can usually create contracts with no deposits and give yourself even more safety.
I use Option to Purchase agreements for all non-institutional sellers. It states I’m not the end buyer and that the purpose will be for me to market the property to find an end buyer. There’s no EMD either.
I actually read a post the other day either from REIclub.com or one of the other sites that said you can even use Option to Purchase agreements for short sales. Until I read that, I didn’t know you could. But then, with a short sale, you’re dealing with a non-institutional seller.