Purchase Agreement Document in Califonia - use CAR or other doc?

Question

I am submitting a written offer on a property here in California, which I have not determined yet if I will wholesale or flip. I am a licensed and active Realtor in California, and can use a CAR purchase agreement. Should I use a CAR purchase agreement or use something else? I am concerned about  being able to assign the contract if I decide to wholesale. I realize there is an assignment of agreement addendum which I can use, but is this the best path?

A couple other questions:

1) If I am using private money, do I still check the "all cash" offer box?

2) Do you guys put down an EMD? If so, how do I recoup that in case I cant fund/wholesale within the time frame?

3) The seller has requested proof of funds. I am using a hard money lender, who provided me a "notice of intent to lend", essentially a pre qualification. Is this typical/sufficient?

Steven Tankersley · Answer

Also, I put 0 EMD down. They did not ask for one, so unless asked I don't plan on offering it.

Steven Tankersley · Answer

Thanks! I sent the offer 2 days ago, using our CAR forms. Funds were listed as "financed" with the "other" box checked - private investor. I have a bank statement from a friend of a friend showing 1.7mil available. I wrote the purchase agreement in my name with "or assigned" after, in case I opt to wholesale. I explained it was because we form a LLC for each flip (which is the truth). Fingers crossed.

Aaron K. · Answer

If it is a line of credit then it can be considered cash, if it is MLS you should definitely use CAR or else you might scare off the other agent and consequently the seller, if you are worried about it you can always write the offer as from yourself or assignee, but again this may put off some agents/ sellers.  Hope that helps.

Bruce May · Answer

@Steven Tankersley I've wholesaled with both the CAR forms and with my own contract. Both work just fine. As for your questions, if the private money is going in without a 1st trust deed being created then you can say it's a cash offer otherwise you should/could provide a proof of funds letter from the private money source and a copy of their bank statement showing they have the funds. (That's how my company does it). #2) You are responsible for the EMD if you don't perform in the timeframe stipulated in the contract, so you could lose your EMD.