Wholesales...How Do You Successfully Object To Sellers Asking For $$ Down At Contract?

[Adam Ayer]

Wholesalers. We've all come across it:

... You find a potentially great property to wholesale. You negotiate the purchase price to a workable number. You're ready to put the property under contract and... the seller asks for a substantial downpayment/deposit.

What do you do to overcome this potential deal stopper?

 

I'd love to hear what has worked for you (I'm extremely interested in what has worked for you NY wholesalers... being in an attorney state).

[Adam Ayer]

Fantastic input Nick and Charles. Great advice for us new investors. I'll be sure to integrate much of what both of you said.

 

Follow-up question: How do you handle a seller being squeamish about tying up their property for 30 days with only $10 or $500 down?

[Albert Wu]

Give me a ring :)

[Charles Tappen]

Charles Tappen said:

Adam,

 

In the past I have always drafted the intial contract, its my deal and I don't give my criteria, I tell it in contract.  I do put in and/or assigns and dont say anything.  If I get told  no or what is that, I say it is because I am an investor and may change the entity I close in later.  As far as cash down,  I ususally do $500.00 and if they balk at it, I again tell them I am an investor and cannot have lots of money tied up in all kinds of contracts that might go no where which, in my mind is a take away from them ( like the property may not be good enough) and if still there is an issue, I may shorten due dilligence or inspection period...I just try to give something so they feel a little in control.   Hope that helps.

 

Charles

Adam Ayer said:

Hi Nick,

I didn't really have a specific lead in mind, as it was general question... but now that you mention it, I'll share one my experiences:

I acquired a lead through Craigslist. We spoke on the phone (by we I mean myself and the property owner's acting realtor), met at the property, and agreed on an a purchase price a day later. I emailed him my criteria (and/or assigns, and inspection clause) for their attorney to draft up paperwork to be sent to my attorney.

After consulting with their attorney, the realtor said his client was advised to collect $5000 down just to enter into the purchase agreement with and/or assigns.

So what do you do? How would you handle that?

 

Nick Tang said:

To start things off, I like to ask you how you found your lead?

[Charles Tappen]

Adam,

 

In the past I have always drafted the intial contract, its your deal.  I do put in and/or assigns and dont say anything.  If I get told  no or what is that, I say it is because I am an investor and may change the entity I close in later.  As far as cash down,  I ususally do $500.00 and if they balk at it, I again tell them I am an investor and cannot have lots of money tied up in all kinds of contracts that might go no where which, in my mind is a take away from them ( like the property may not be good enough) and if still there is an issue, I may shorten due dilligence or inspection period...I just try to give something so they feel a little in control.   Hope that helps.

 

Charles

Adam Ayer said:

Hi Nick,

I didn't really have a specific lead in mind, as it was general question... but now that you mention it, I'll share one my experiences:

I acquired a lead through Craigslist. We spoke on the phone (by we I mean myself and the property owner's acting realtor), met at the property, and agreed on an a purchase price a day later. I emailed him my criteria (and/or assigns, and inspection clause) for their attorney to draft up paperwork to be sent to my attorney.

After consulting with their attorney, the realtor said his client was advised to collect $5000 down just to enter into the purchase agreement with and/or assigns.

So what do you do? How would you handle that?

 

Nick Tang said:

To start things off, I like to ask you how you found your lead?

[Adam Ayer]

Hi Nick,

I didn't really have a specific lead in mind, as it was general question... but now that you mention it, I'll share one my experiences:

I acquired a lead through Craigslist. We spoke on the phone (by we I mean myself and the property owner's acting realtor), met at the property, and agreed on an a purchase price a day later. I emailed him my criteria (and/or assigns, and inspection clause) for their attorney to draft up paperwork to be sent to my attorney.

After consulting with their attorney, the realtor said his client was advised to collect $5000 down just to enter into the purchase agreement with and/or assigns.

So what do you do? How would you handle that?

 

Nick Tang said:

To start things off, I like to ask you how you found your lead?