help me stay protected.

Bird Dogs, Wholesaling
1

Can anyone tell me if there is a contract that I can have investors sign to keep them from contacting a seller directly once I present the property to them? :deal

2

Hi,

I have never had a fellow investor try to go around me and speak with my seller! There are a few reasons for this:

  1. I come from a place of strength and have the ability to close a property myself if a end buyer pulls out, but maybe more importantly I present myself as confident and knowledgeable and don’t put all my cards on the table.

  2. I only buy properties my end buyers want, if Tim, Bob and Steve want a 4 bedroom and Jerry is looking for a 2 bedroom and Marty is looking for a 3 bedroom and John wants a 5 bedroom, then I am only buying 4 bedrooms as I know I have at least 3 interested qualified buyers! I don’t buy a two bedroom even if it’s a little better deal as I have to have multiple buyers for the same property.

  3. I charge a fair margin for wholesale properties between my purchase price and what I charge my end buyer, most investors know a wholesaler charges a margin but expects it to be fair. My rule of thumb has been no more than 6% on assignment of contract and no more than 10% on transactional closing deals for wholesale property.

  4. If your selling to a retail buyer none of the above count as the buyer is not expecting a wholesale deal.

  5. If you have a real signed contract then a million people can contact your seller and it doesn’t matter, but make sure the contract is signed and you are including earnest money and make sure you open escrow. Other than making the person going around you frustrated, you and your seller get a good laugh.

  6. But make sure you have built a real buyers list and your buying the property because you have buyers looking for that type, size, area, style, finishes, etc. wanted by these buyers then the Bozo going around has no leg to stand on and since you have buyers wrap up an assignment form or new contract and go on to the next property!

  7. Stop doing business with Bozo’s and don’t sell property to them, it’s rude to try to go around a property with a legal contract!

          GR
3

You can record a “Memorandum of Agreement” against the seller’s property to keep the competition at bay, and keep the seller honest.

Sometimes it’s known as a “Notice of Agreement.”

You see this happen more often on commercial transactions.

However, I’ve recorded memorandums against properties that were especially good deals; that were also likely to be shopped by the seller, despite a signed purchase and sale agreement.

That is to say, I blocked the seller from abandoning my contract, and going after a better offer from another buyer, that called from the seller’s advertising, and attempted to weasel me out of my deal.

I’ve had sellers discover that I liened their property, and offer me money to walk (after their attorney informed him, that my contract was enforceable).

Meanwhile, there’s no such thing as a loyal seller. If they get a chance to get more money, and/or pursue a competing buyer looks more capable, they’ll bail on your deal faster than a Lindsey Lohan drug relapse.

4

Thank you for the info. I currently have a house under contract the contract has a kick out clause for both parties. Even though the property isn’t listed I don’t want potential buyers to pull PVA details to contact the owner.

5

Well, in that case, you’re screwed. Just saying. :banghead

6

Wait, can you clarify a bit because I would like to do this, so all you do is get a notice of agreement on top of your purchase and sale agreement? how do you get that done? then you actually “blocked”? the seller from abandoning your contract? because you did the notice of agreement that is what put a lien on the house? and THEIR attorney told them that YOU could enforce the contract? what does that mean? THANKS :help

7

I don’t know if you can record a one-sided memorandum in every state (where only one party notarizes the document).

However, in many (commercial) cases, both parties agree to a stipulation in the purchase agreement, that a notice regarding the transaction (whatever its nature), will be recorded against the property by the buyer.

However, I’ve never asked a seller, “Uh, could you please initial where it says that you understand that I’m gonna record a notice against your property, that will keep you from selling it even to your great, great, great grand children, without my cooperation?”

However, that’s exactly what some of my investor friends do, in essence.

Doing ‘that’ that would certainly smoke out the deal shoppers, wouldn’t it?