What i dont undersatnd in real estate wholesaling is, that when you sign a contract with the seller, how does he exept no deposit, he sees that you are not serious, let me ask you if someone with offer to buy a house from you, and says i can write so many checks wouldnt you get scared, and think that the guy is not serious, that somethink is fishy over her? i am trying to understand i know that people do it, i am only asking how?? please explain thanks
Hi,
This is a very good question. When you and I write a contract everything is negotiable; after all were entering into an agreement that both parties want and agree to.
There are a number of different ways to put earnest money (You refered to as a check) with the contract at time of signing. First we can create a promissory note which basically says I will pay a certain amount of money at a certain point in time.
We can provide actual cash at time of signing that will be entered to open a escrow.
We can provide a written check payable through a bank made to the order of xyz escrow co.
We can provide the copy of a check to seller with the understanding that upon exceptance buyer will put a real check with the contract to open escrow.
You can start and open escrow with as little as $10 or $20 bucks, with the agreement that upon removal of all contingencies buyer will increase earnest money to $XXXX dollars. Or you can set it up to increase escrow funds 5 days before closing or do something else creative.
Now, I make upwards of 30 or 40 offers a week, I convey to seller that a copy of my real earnest money check is enclosed for say $1000 and upon exceptance of this contract I will replace the copy with a real check to open escrow! I tell the seller I am making so many offers that I would have to order new checks every month and that when and if my offer is excepted a real check will accompany the contract to open escrow!
Sometimes I offer $10 dollars and tell the seller I will increase the earnest money to $1000 dollars when I remove all contingencies, then I use the contingency period to market and find a qualified buyer to purchase from me, and then use transitional funding to close back to back to an end buyer or use transitional funding and set up hard money for a purchase from another investor
Good luck,
GR