All Forum Posts by: Lorenzo Caballero

The seller wanted 1% as the earnest deposit which is $4,000. As for the date due, there is no specific date it is due. All my contract says about the earnest deposit is the amount, who it will be held in escrow by, and that it will be credited to the buyer at the time of closing. It has nothing stating when it needs to be made in relation to the date of the agreement.

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Originally posted by @Michael Guzik:

@Lorenzo Caballero I'm sorry to hear this happened brother, but don't beat yourself up too much because sh%t happens, that's just life. Stuff rarely goes exactly as planned! IMO it sounds like you did what you were supposed to do, and have the proof to back it up. I would contact the seller and apologize and ask if they still want to make money off of this house? They probably do and tell them you will work twice as hard to market and find another cash buyer. The seller isn't the bad guy man, he is naturally scared as anyone in his position would be. He thought his property would be sold and it was a done deal, so this is him lashing out in fear to get something/anything he can. Really just try and calm him down and go and bust your balls to find another buyer and make it happen! Good luck!

I am working on that as we speak brother! Thank you for your words and perspective. Greatly appreciated man

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Originally posted by @Kris Wong:

I am not a lawyer, but liability is determined by the contract that both parties have signed. The seller is likely to be frustrated by this situation, so consider their point of view in conversations with them. Treat them with respect, explain the contract to them, and emphasize how your are in compliance with it.

Most definitely. I don't want to burn any bridges or just blow anyone off. I treat everyone with respect and honesty. I have been 100% open with the seller every step of the way and explained everything about my intentions and the terms of the contract

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Originally posted by @Kris Wong:

Originally posted by @Lorenzo Caballero:

Originally posted by @John Thedford:

why are you signing contracts to purchase if you have no intention of purchasing isn't that called fraud?

The contract I use was drafted specifically for wholesaling by an investor/wholesaler friendly law firm. We do not have to use a standard real estate contract in Texas (TREC) or in your case the FAR-BAR contract. Before I sign anything, I tell the seller what my intentions are out of the gate. I tell them I will not be the one purchasing and that I will be assigning it to an investor who will either be rehabbing the house or holding it as a rental. I make sure they understand. I am not comitting fraud as I follow the specific verbiage in my contract to protect me from that. And I make sure I keep all conversations via email and text to confirm and have proof that I explained my intentions from the beginning BEFORE I sign anything

If you don't fully understand the contract you are using (that sounds like a big problem), then you should contact the 3rd party that drafted it. Given that, this is TX, where option money is standard practice. Are you not using option money on all your contracts?

Also, I understand my contract fully. It is a one page contract that is pretty cut and dry. But being how I have never had someone suggest I put down the EM, due to my transparency on my intentions BEFORE I sign the contract or even send it to the seller, that is the reason for my original question.

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Originally posted by @Kris Wong:

Also, do you not have other buyers that would be interested in this deal? I think you will find that if you start backing out of contracts regularly, that you're going to build a reputation for yourself that you'd rather not have.

This is the first deal where I have had the buyer back out and not have a back up. I only get properties from the buyers end matching their criteria. I find it a waste of the seller's time to get a house on contract and then try finding a buyer. The issue is the price of the property ($405k) and the fact that it is a new construction opportunity for homes selling between $1.1mil and $1.7mil. This isn't your typical wholesale deal where the ARV is between $100k - $250k

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Originally posted by @John Thedford:

why are you signing contracts to purchase if you have no intention of purchasing isn't that called fraud?

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I have a property under contract and an issue came up with my end buyer. He is unable to take the property because of an unexpected problem on another house he is rehabbing. When talking to the seller BEFORE getting it on contract, I was 100% transparent about how I am not funding the deal in any way and I will be assigning the property. Now that my buyer backed out, the seller is wanting me to put the earnest money down. Am I still liable for the EM? I have all the text messages showing the conversation where I am saying I am not funding the deal and I am simply assigning the property. I have even spoken to his title company about my intentions. Given this scenario, can I walk away without putting the EM down? There is no clause in the contract stating when the EM needs to be put down. It has only been on contract for a little over a week

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All Forum Posts by: Lorenzo Caballero

Lorenzo Caballero has started 1 posts and replied 7 times.

Post: Backing out of a deal

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Post: Backing out of a deal