End buyer tries to change original terms of contract?

Question

I'M DEALING WITH THIS SCENARIO AS WE SPEAK!!

Have often does your end buyer investor try to change original terms of your wholesale contract? I've agreed to a price higher than what I contracted with for the homeowner but he's requesting other changes on the contract.
For instance I have an end buyer who wants to change/amend closing date, and option period, closing costs, and a few other things to his liking.

Obviously, I don't think this will fly with the seller since I'm (and/or assigns) already under contract with her. Why would she agree to less attractive terms than she already has?

I just want to know how often this may occur, and if I should even deal with it. IMO, if he doesn't agree to the terms I got with the seller, then move on and let me sale to someone who wants it more.
Advice?

Jerry Puckett · Answer

Hi Jason,
You know if it were easy, everyone would do it. I take it this was a case of finding the deal first and the buyer second? To answer your question, when you do a deal this way, I think you'll find that the majority of the time that your end buyer will seek more protections than you thought to negotiate. That also happens with less seasoned investors who are nervous and afraid of getting screwed.

Sometimes it's an easy thing like the closing date. But sometimes it's harder, like a new roof because you missed it in your repair estimate. You know your seller and what you can or can't do. If the deal is strong enough, don't be afraid to go find another buyer. OTOH, your seller was motivated enough to give you a discount. The other details may be less important than the price.

Now I don't really get the getting a check after closing part. I sit with a buyer and let him read the contract. If he likes the deal I negotiated, he signs the assignment which states that I get a non refundable 1k deposit. The rest of my fee, which is also stated clearly on the assignment, I get at closing.

But here's an alternative that I've only thought to use with folks who are financing rather than paying cash. Use an Option to Purchase contract where you and the seller agree on a price and an amount of time to find a buyer. Sell the option to your end buyer and let them enter in to their own contract with the seller.

The bottom line is to always negotiate the best contract you can. Get as many warranties and representations as you can, while giving as few as possible. Over time you'll learn what's important to your buyers.

Hope this helps.

Curt Davis · Answer

its just like being a landlord,  either you train the buyer or the buyer trains you.  If your not in control then you have lost control.

Bryan Hancock · Answer

Sounds to me like you're a broker and not a wholesaler!  Create some scarcity with him...why is he running the deal?

Terry Royce · Answer

Do you or the title company have a certified or cashed check in escrow????

If not you are probably getting played by the end buyer.

Call him and tell him you are heading in a different direction with another buyer. If he doesnt have a deposit up you have nothing to loose anyway most likely.

Start remarketing the property immediately.

Try to get your deposits CERTIFIED. I had a deal fall apart because a buyer wrote a bad check, then backed out..... sucks, but sometimes the best way to learn is the hard way, so learn from MY mistakes.

GOOD LUCK

Jimmy C. · Answer

First of all, like someone said get a certified check for a deposit, so they cant cancel the payment on you.  The remainder of the funds due to you, should be paid at closing by the title company.  Meaning, he shouldnt have to write you a check at closing, just a check to close escrow.

I have not done as many wholesale deals as everyone here, but I have NEVER changed my original contract.  Aside from moving the closing date a few days I would never do that anyway.

Buyers know up front that they are getting the property as-is, they know when they have to close by, they know that they need to do their due dilligence before giving me a deposit.  So the contract would just reinforce those things when it comes over their fax.

Joel Owens · Answer

Sounds like a scammer wanting the deal and will screw you out of money.

PERSONAL check?? right................

Don't trust certified funds either.When I get my commission checks from a closing attorney or receive a cashiers check my bank waits a few days for it to clear.

They have seen fraudulent cashiers checks and have seen social security checks even bounce before from the government.

For cash have a pen checker for counter fit bills.

It's wild in today's times for sure.

Jimmy C. · Answer

Great news Jason.  Congrats and GJ!

Jason K. · Answer

Well, found a buyer last week! Planning to close by friday

Jimmy C. · Answer

No, but you could call the other wholesalers in your area for free advertising.  Tell them you will split the profits, or tell them a lower price than you are advertising for and they keep the difference.

You should also take your deal to a local REIA to wholesale it as well.  Thats another free way to a real buyer.

Jason K. · Answer

Nope, struggling with little to no marketing presence. Was burned earlier this year on a marketing campaign for another project and am timid to spend anything for advertising until I get this deal sold. Hopefully.

Got any other online sources that are cheap or free like Craigslist that gets alot of traffic?

End buyer tries to change original terms of contract?

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