What happens if you cannot close, because you cannot find a buyer and something goes wrong with your financing? Obviously you will lose your earnest money. What else can/will happen?
I’d like to know something along the same lines. I’ve been taught to request 90 days to close after getting a property under contract, but a seller of a significantly undervalued property I am in negotiations with wants to close in only 30 days. I plan to just market the property as a rehabber special and assign it, but if I don’t get any takers, I’ll just round robin auction it. However if the auction doesnt get enough traffic, bids or a high enough sales price, then will 30 days be long enough? Most likely the buyer that I find will want some time to get financing together and go to closing as well, probably 30 days themself.
So again, is 30 days enough time to market and flip a prooperty that’s under contract or should I try to get 60 days minimum?
I always have at least a 10 day option period on my contracts. That is plenty of time to find a buyer for a good deal. If you can’t, exercise the option and move on. The option fee can be for as little as $1 a day. Also, if you plan to wholesale, I do not recommend putting out your own earnest money. I’ve learned that the hard way. Your end buyer should put up earnest money. If they’re not willing to do that, get another buyer.
Don’t you mean let the option expire and move on? Thanks for the advice on the earnest money.
If you find a buyer within 10 days – are you exercising the option and assigning the option to the buyer or assigning the contract to the buyer?
I’m not saying let it expire, be sure you have informed the seller or the selling agent you are exercsing the option and not going to move forward with it. Just because you let the 10 days go by doesn’t mean you’re not obligated. You absolutely are unless you notify the seller with the option period that you are not doing the deal.
To answer your second question, when you assign a contract to someone you are assigning all terms of that contract. I don’t know what you mean about assigning just the option.
My fault, sorry! That’s why my questions made no sense to you I thought you meant you were putting a purchase option on the property not an option period in the contract.
In my contracts I usually put 30 days to close with an additional 15 day extension if the cause of delay is due to the lender or title company not having their end of the work done. That basically gives me 15 days to find a buyer and assign the contract and leaves 30 days after that for my buyer to close.
If it starts getting down to the last few days before closing and there has to be an extension usually the seller doesn’t care because they know it’s only a matter of finishing some paperwork and closing is only a few days away.
Always have the buyer lined up 1st then go for it.
You should have a Lender under your belt in order to avoid blowups.