Earnest Money and REO Offers | Flip This Wholesaler

Hey Guys!

I’ve got another Reader Mail video for ya.

This one is all about REOs and earnest money deposits….

Enjoy!

On August 04, 2009 at 8:22am, Brandon said...

Hi Steph!

Let’s say you are using an inspection contingency and you end up backing out because the house didn’t pass your inspections.

What do you have to do to get your deposit back? How long does it take?

Thanks,
B
- On August 04, 2009 at 10:12am, Stephani said...
  
  Hi Brandon,
  
  You will usually need to submit something in writing to the title co and agent letting them know that you are not moving forward with the deal based on your inspections. Check your contract/addendum, though, it should tell you exactly what is required if you want to cancel.
  
  I’ve only done this once, and it was with a non-REO property. The title company was local, so I just went and picked up my check a few days later.
  
  HTH,
  Steph
On August 04, 2009 at 8:28am, Kelly Miller said...

Good stuff. Thank you Steph! So, you give the check with the original offer, then you have to give a money order or cashier’s check to replace the check when your offer is accepted and you return the bank’s addendum?
- On August 04, 2009 at 10:19am, Stephani said...
  
  Hi Kelly,
  
  When I make my initial offer, I just send in the offer with my proof of funds- no check is usually needed up front. Sometimes they will want a copy of the check, but not usually.
  
  I make my offers through a licensed friend, though, so it may be different for you if you are using a buyer’s agent or going directly to the listing agent- they may ask for the check upfront. I’ve never had to worry about it until after the offer is accepted..
  
  Steph
On August 04, 2009 at 9:49am, Build Bankroll said...

Agents can tell quite quickly if your delaying them on submitting the EMD. I’d recommend you come up with at least $1,000 somehow.
On August 04, 2009 at 8:37pm, Bruce said...

Hi Steph…it’s interesting that the bank reos are requiring Cashiers or Certified funds….Compared to regular seller-owned properties where they regularly accept personal checks everyday.

Anyway, good info for investors to know. BTW, up here in Chicago its gotten real hot so when you come to visit you’ll feel right at home !
- On August 04, 2009 at 8:42pm, Stephani said...
  
  Hey Bruce!
  
  Glad to hear it’s not snowing there.
  
  We’ll have to get together one of these times when I’m up that way and grab a beer or lunch or something..
On August 05, 2009 at 6:09am, Sanford said...

Hi Steph,

Quick question for you (a bit off topic though). I know you work directly with listing agents sometimes. How do you go about approaching a listing agent directly to make an offer/form a relationship? Do they know you are a wholesaler and do they care?

I’ve submitted 61 offers in the last two months through buyers agents and no deals to date…got a few counters and a few highest and best requests, but without direct contact to the listing agents, it’s hard to tell how close my offers are to being accepted. It seems that going direct to the LA and giving the LA the buyers agent commission could be a better strategy.

Thanks!
Sanford
On August 05, 2009 at 6:56am, Stephani said...

Hi Sanford,

No, I don’t tell them that I am wholesaling the property.

I write up the contracts and everything myself, then scan and email it in to the listing agent. I include a cover sheet that says I am being represented by a buyers agent (my friend John), but he is not taking a commission and that they can keep both sides. Basically, I’m telling them that they don’t have to do squat, but they can still have both sides of the commission. They like this.

I just try to make it as easy on them as possible.

HTH,
Steph
On August 05, 2009 at 9:33am, Thomas said...

Hey Steph, I just made my first REO offer here in Houston, TX today. I used a proof of funds letter from fundthiswholesaler.com and the agent told me that the bank would not accept this. They said I needed a bank statement that would state that I had this money sitting in the bank somewhere. Is this true or does the agent just want this? Basically I didn’t even get to the part of having to worry about earnest money. Is this common? Thanks
On August 05, 2009 at 10:36am, Stephani said...

Hi Thomas,

It just depends on the lender. Sometimes they will accept the letter as a cash offer, and sometimes they won’t.

You should still be able to make the offer, but just not as a cash offer.

They all have different criteria as to what they will and will not accept.

Steph
On August 05, 2009 at 1:32pm, Sanford said...

Thanks, Steph!
Yes, that’s very helpful! I’m going to take that approach on my next round of offers this week.
Sanford
On August 26, 2009 at 9:06pm, Christopher said...

Thanks for paying it forward and also taking the time to share your real estate experiences with us.
On September 01, 2009 at 2:47pm, Drenda said...

Steph How long after you make your offer does the bank usually accept it or counter the offer?
- On September 01, 2009 at 2:59pm, Stephani said...
  
  Hi Drenda,
  
  It usually takes them a few days to get back to you with a response. Sometimes it’s the same day, but most often somewhere in the 3-5 range.
  
  Steph
On September 02, 2009 at 1:24pm, Darnell Thorpe said...

I love your blog! You have helped out with the problems I face the most while investing. Thanks soooo much!

His Blessings Real Estate LLC
Owner
Darnell Thorpe
- On September 02, 2009 at 1:41pm, Stephani said...
  
  Thanks for stopping by, Darnell..
On September 23, 2009 at 6:41pm, Michael Solis said...

In the case of earnest deposit money when using a Land Trust to flip an REO…

CAn i get around having to come up with Earnest Deposit Money by selling the Land Trust or waiting til my buyer closes on the REO with the Land Trust?…the bank would need my deposit,proof of funds letter and my bank statements if they ask correct? or would my buyer provide that if they have assigned their own trustee?…this is fuzzy for me
On September 30, 2009 at 1:19pm, michaelangelo said...

Hey Steph, just wanted to say that I have been flipping and rehabbing for a number of years but still manage to learn new ways of doing things. Your blog and videos have been helpful even though I’m far from a newbie. For your emailer who requested info regarding ernest money deposits I would suggest they talk to their realtor about the possibility of signing a note for the deposit which states a specific date when the deposit will be paid. I have been fortunate enough to find this arrangement and I would not hesitate to ask any realtor, especially those associated with larger firms, for this favor. Once you establish yourself it is really quite easy. Thanks for the great videos and info, mike

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