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Updated over 5 years ago on . Most recent reply

User Stats

85
Posts
32
Votes
Thomas Moran
  • Rental Property Investor
  • Raleigh, NC
32
Votes |
85
Posts

Wholesale Contract - Is this legal?

Thomas Moran
  • Rental Property Investor
  • Raleigh, NC
Posted

Hi BP -

May or may not be in a debacle here so I wanted to consult the community. I am under contract via an assigned contract through a wholesaler. I just figured out the obscene margin that he is making (which doesn't necessarily bother me), and it begs the question why is the seller taking such a hit on equity? Is there something about the house I don't know?

I am going to sleep on it, but I am thinking about exiting the deal. He made me sign a contract that effictively states, "forfiting of earnest money does not release you from the contract, and you can still be forced to close". Now is this legal? I've never heard of anything like this before, and I've never done wholesaling. I had no intention on bailing on the deal, but it's very anxiety provoking to be trapped. 

Thanks in advance. -Tom

Most Popular Reply

User Stats

113
Posts
133
Votes
Cole Raiford
  • Rental Property Investor
  • Gulfport, MS
133
Votes |
113
Posts
Cole Raiford
  • Rental Property Investor
  • Gulfport, MS
Replied

@Thomas Moran whats the ARV of the property? I mean, I get that the assignment fee is really high, but are you getting the house well under market value or not? If it's a good buy for you then you should just be happy and not worry about what the wholesaler is making. If you aren't getting a good buy then that's on you and you shouldn't have agreed to the purchase price in the first place.

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