Earnest Deposit/ Contract

[Jesse Nelson]

Hello all, I'm new to investing and want to get started. I'm curious on when I sign a purchase and sales agreement with the seller, do I give the earnest money to the sellers title company or the buyers title company? Also, what is the best way to make sure your contract is legal? Is using a lawyer the best way, or is that unnecessary? I just don't want to get caught up with bad contracts. I'm have the "flip mans" contract (he's from YouTube) that he uses, just unsure if I can use that. I'm located in Wisconsin, as I'm sure states have different laws. Thanks for the help in advance! Jesse

[Scott Schultz]

First off are you wholesaling or purchasing? it is advisable to use Wisconsin state approved form WB-11 (google it) as well as addendum A or B depending if it is applicable to the transaction, also an addendum S is required under Federal Law if the house was built prior to 1978. and the seller must completer a condition report as well.  If you dont understand fully what I am talking about, you had better get an agent, an attorney or as for help from a title company. the for lays out who holds ernest, typically in WI, 1 title company is used, and ernest is held by the listing broker in their trust account, however if no broker is involved, then a title company will typically hold ernest, some will have a separate ernest agreement. 

as I stated, it is advisable to use state approved forms, however if you are not a party to the contract, you need a license to complete them. In Wisconsin there are several components needed to create a valid contract, all must be met to be enforceable.  PLEASE ask a professional to assist you.   I have been a broker in Wisconsin for 12 years and been party to 700+ transactions, things can get messy if you dont know what you are doing.