House Under Contract...Now What?

Question

I recently just got my first house under contract as a real estate wholesaler, but i'm confused as to what my next step is. My plan is to sell the property contract agreement to an investor to fix and flip. I put a $10 EMD on the house and gave it directly to the homeowner. My question is this...Once I have the contract signed, do I have to open an escrow account? Was I supposed to deposit the $10 into the escrow account? If so, how do i go about opening an escrow account to get this started?

Walter Roby jr · Answer

I second everything @Ryan Dossey said. Congrats on getting it under contract for $10 if it truly is 65% ARV less repairs.

1. (Depending on State) Find Escrow/Title Company that handles Assignments and/or Double Closings.

2. Give them new $10 EMD so it is valid in their eyes. Forfeit the original $10 to the seller.

3. Market Contract to investors on BP, REIAs, local Landlords on GoSection8 or For Rent websites.

4. Schedule Inspection with interested parties.

5. Collect Non-Refundable EMD from winning investor along with Assignment contract or new Purchase Agreement with you as seller.

6. Submit new contracts to escrow.

7. Close.

Ryan Dossey · Answer

@John Thedford Man that's brutal lol. Where do I mail your copy of How to Win Friends and Influence People? ;)

@Mark Lopez Congrats on taking action but you may have put the cart a bit before the horse.

If you've got the funds to close on it that's great. Guys like John get upset (as do I) when folks tie up houses that they can't close on or don't have the ability to close on if needed. That's awesome that you've got the ability and willingness to close on it if need be.

Typically at this point you'd want to approach an investor friendly title company and provide them with the signed contract and contact info of the seller. You'll need to decide if you're double closing or using an assignment agreement. This is typically a peronsl preference but some title companies won't allow your end buyer to fund both sides of the contract. If that's the case look for a more investor friendly title co, use your funds to close and resell, or get transactional funding.

As far as building a buyers list I'd attend local REIAS and network on BP.

Good luck!

Ryan Dossey · Answer

I hope you've got your flame suit on... It's about to get hot in here.

Ideally if you're wholesaling you're getting stuff under contract at a price where it's such a good deal that you'll close on it if you can't find a buyer. Do you have folks that want to buy your deals? Ideally if you don't have buyers you're funneling your deals to someone who has them.

Did you get the house under contract at 65-70% of ARV - Repairs?

Walter Roby jr · Answer

It costs nothing to open up and all their fees are paid out at the end. I once went with a buyer's closing recommendation. Won't do that again because they did not know what the heck an assignment was and I had to chase down my fee.

John Thedford · Answer

Send to"Wholesaler Hunter"Naples, FL

John Thedford · Answer

$10 EMD. You found a sucker. If you can't close or unlicensed broker it then you lose your life savings!

Mark Lopez · Answer

Hey, @Brian Pulaski

I've only got the signed agreement between myself and the seller. I haven't got a buyer yet, but I do have a list of buyers i'll be getting in touch with soon. The deal was locked down at an awesome price so I just need to know if the signed agreement between myself and the seller along with EMD info need to be submitted into an escrow account or if i have to wait until i've got a buyer to begin that process.

Matthew Paul · Answer

Its a little late to be asking those questions .

Did you just give them ten dollars , or ten thousand  ?

Mark Lopez · Answer

@Walter Roby jr

You're a good man. That was the only piece of info I was missing. I have a buyers list and am already in the process of marketing it. Just had photos taken of it and video.

Mark Lopez · Answer

@Walter Roby jr

@Ryan Dossey

True gentlemen and scholars Haha! great advice!

Do you know how much it costs to submit the paperwork and EMD to the title company and what if my end buyer wants to close at a different title company? I appreciate your help :)

House Under Contract...Now What?

Most Popular Reply