I am new to bird dogging. I have expertise in construction, accounting and contract law, but I have a question.
If I sign a contract that I want to assign, and I have to pay $1,000 to 2,000 in earnest money, how can I be assured that I won’t lose this money if I can’t find an investor who will buy the property?
Is there a clause that I can put into the contract that will get me this money back if things don’t work out?
Most Investors won’t talk to a bird dog or wholesaler without a signed contract in place. How do I protect my earnest money?
you buy the property; that is what you are contracting with the seller to do. they may choose to keep your earnest money as liquidated damages in addition to or in lieu of specific performance. this would be why many seller’s do not want to chance an assignable contract, they are at risk when you don’t fulfill your personal business plan.
Good Afternoon Tim,
I never, never put up earnest money unless I already have a buyer in place. I generally use a letter of credit from my bank. In addition, I put a clause in my offer that makes my offer “subject to” me finding a qualified buyer or someone to assign the contract too.
Most real estate people do not like this, but I found I needed a full time accountant just to track my earnest money before I started useing a letter of credit.