Pay attorney if deal falls apart?

[Dave McEvoy]

I'm about to sign a contract for a wholesale deal in NY. Putting $500 EMD. My attorney said if the deal falls through that I'm out my EMD and have to pay him. I wanted an inspection clause to protect me in case I cancel the contract for whatever reason. He said I could only get my money back if I actually get an inspection and not because I wanted to back out. I was always under the impression if you were assigning contracts that the end buyer would use the wholesalers attorney to close the deal. Seems everything I'm learning in the real world of wholesaling does not work in NY? Wholesaling being no risk seems like a bunch of BS.

[Jessica Zolotorofe]

New York is pretty standard actually. I don't know any attorney that would work for free anywhere in the country. Giving a discount in good faith, or waiving a fee here and there, if you bring them a lot of business, but not just a freebee because you couldn't make your deal work. It's a risk you take wholesaling, just like inspections. You don't get to not pay the inspector because your deal falls through, or not pay a title company, or anyone else that provides you with a service.

As far as the advice to be upfront with the seller, unless there is a requirement in your state to disclose (NY doesn't have one), I wholeheartedly disagree. As soon as the seller knows that you have someone interested in spending more money on their property why would they ever sell it to you instead of holding out for a higher purchase price if you believe you will or already have someone willing to pay it? Why would a seller ever agree to either allow you to terminate if you don't find an end buyer, or waive an earnest money deposit because you are essentially selling the property to someone else and making money off of their asset? There is zero benefit. It makes no sense. I don't suggest you ever lie, but not disclosing is obviously favorable if it is permissible under the law.