Wholesale Earnest Money clause

[Christian Arellano]

Does anyone have a good clause to get your earnest money back when you don't end up buying an REO property from an agent. I would want to get my EM back just in case I don't find a buyer for the property. Also whats another good clause I would need to get out of the agreement? I want to do some wholesale type deals by buying the REO property first then finding a buyer. I figure once I have a property then I can build my buyers list so they'll know I'm serious. Its hard to build a buyers list when you have no properties to sell.

[Jon Holdman]

You can use the inspection and financing contingencies. These aren't usually very long, though, and they weaken your offer. Many banks seem to have adopted a standard inspection, typically about 10 days. Financing might be able to be a little longer, but you're going to need to come up with a buyer quick.

If you try to put in some sort of "if I don't get a buyer" contingency, your offer's going to be rejected. Banks DO NOT want you to be able to wholesale properties. They will do everything they can to prevent you from doing this. Don't plan on any sympathy at all if you fail.

You really must start building your buyers list before you have a property. You need to be able to blast out your new find to a list of people as soon as you get something under contract. Investors know the drill with wholesaling, and know properties come suddenly and go quickly (or not, depending on the deal.) Yeah, you have no credibility at first, but that will change if you actually come through with something. I've given my info to dozens of wholesalers and would be wholesalers. I had three listings today from one guy. Easily two thirds I never hear from again.