NEWBIE. At closing with wholesaling, do the buyer and seller....

[Joshua Horn]

At closing with wholesaling, do the buyer, seller and me all meet there at a set date and time? and if so my follow up question is what's to stop the seller from when he see's my assignment fee of, lets say 8K, from just turning to the end buyer and telling him to buy it directly from him? Could someone give me an idea of what and how it kind of goes down with a basic wholesaling closing goes down? Can I pick separate times for them to both go? Thanks in advance!

[Karen Rittenhouse]

@Joshua Horn Usually even the attorneys prefer that everyone not be there at the same time. They don't want to encourage last minute disagreements about any aspect of closing, even in a retail sale. Talk to the attorney about what you prefer and let the attorney lead you and set up closing times for everyone. 

Allowing each person to know what's happening including the numbers before hand makes all closings much smoother. Our buyers know we're in the business to make a profit and they expect this. If you don't want the buyer to know what you're making, you can always do 2 closings. First, you close with the seller when you buy the property - then you close with your buyer when you sell the property. They don't see the paperwork for the other closings.

As@Anthony Angotti mentioned, you can protect your offer by recording an Affidavit of Memorandum of Purchase and Sale. It states that you have a contract to purchase but does not show your purchase and sale contract. You want to keep those numbers private. The Affidavit lets any other closing attorney (or Title Company) know that this title is clouded by a contract so you will have to be contacted and release your lien on the title for someone else to purchase behind your back. We record these regularly and have protected more than one property. It is another place for negotiation - sometimes we release the seller if they pay us to take the Affidavit off their title.

So many moving parts in real estate!

Thanks for asking - good luck - let us know how this turns out!