I have been reading through the articles on this site for a few weeks, I have always been interested in real estate but thought I needed lots of money to get started, until I heard about wholesaling, which is how I plan to start out. But have a few questions about contracts.
When I get a house under contract, after it is signed by both parties, what do I do with it then? and does the seller get a copy?
If the seller gets a copy also, if I was to try to get out of a contract (with a weasal or inspection clause) if the seller has a copy and I have a copy how does both contracts become void so to say?
Sorry if this is confusing, I wasn’t sure how to word it. Thanks in advance guys! and gals!
It really doesn’t matter who gets a copy as long as you have one. You can give the seller a copy if you like. Now, make sure you make the contract assignable by including assignment adendum or or other means. It doesn’t matter how many copies of the contract exists as long as you let it expire or you can prove the contract was voided.
You should not need clauses to get out of the deal, just put $10 earnest money and if you cannot sell it, then let them keep the $10. Please do not mess with people in foreclosure if you cannot close yourself! You don’t want to try to wholesale it and fail then walk away let them go into foreclosure.
Now, if you want to wholesale, make sure you are buying right. Find out what the people you want to wholesale to want and the formula they use that way you don’t over pay.
Thanks for your response and your advice, One more thing, you said it doesn’t matter as long as I can prove it was voided, how can I prove that if 2 copies or more exist?
It really depends on who is holding your ernest money. I would not give it to a distressed seller to begin with. If you are buying through a realtor, then an escrow or an atterny is holding the check. If you are buying directly, then you should not put more than $10 or $100 as an escrow. If you are closing through a title company, then the title company will hold the escrow.
You can notify them in person, fax, via their realtor, or certified mail. That is usually is sufficient. What exactly are you worried about? forcing you to buy?
scflipper
you need to understand contracts, chat with an attorney. they do not become void, they are only void if it was never an enforceable contract. you can terminate a contract, if you have a contingency clause or option period (like texas allows). make sure you fully understand what your contract states and what your options are.
Fadiz,
Yea kinda worried about getting forced to close, like I said I am new to this and just wanna assign my contracts to a few investors I have been talking with, I guess Im just scared to sign a contract and getting tied to it and not being able to close.
Wendy,
Thanks for your response, In order to terminate a contract does me the buyer and the seller have to sign anything? what exactly terminates a contract? is it done verbally? thanks
nothing in real estate should be done verbally/always put things in writing.
to release a contract and invoke your right to terminate during an option period(if you had one) you just notify in writing the seller at the direction of where the contract stated notices to be sent. also let the title co. know. to actually terminate a contract requires signature of both or all parties (buyer(s) and seller(s)). this may not be accepted by one or the other, even if you have a contingency (e.g. financing) there are requirements for you to follow. I am biased, as i was a Realtor for 7 years, now a mortgage loan officer, but I would recommend you work with a good agent on your first couple of transactions, so they can advise you of repercussions with contracts.
So to get this startight, even if I have a contigency and an option period, the seller does not have to sign the termination? If they refuse to sign, what happens? court?
scflipper,
just a note, i am both wasj and wendy, i forgot my pw and had to reup…
anyway, i am not familiar with any state but texas, so get local advice. in texas if you buy an option period, and you opt out before the expiration of that period, all you need to do is notify, as prescribed in the contract, the seller. for termination you must notify a seller if you are unable to perform due to a contingency not being met, but typically must have seller sign off before recovering your earnest money. remember, that you must follow the contract for your contingency, (e.g. if you have a third party financing contingency and you state you will have financing in 24 days, you must notify by the 24th day that you are unable to get that financing, or you loose your right to the contingency. i am not an attorney, and they certainly have better interpretation of contracts than i, but these are the things i have been taught as a licensed agent (now retired).