A wholesale agreement for properties in Dallas-Fort Worth will be important to you as an investor, so make sure you grasp and understand everything about it. Learn more about the process and what to expect in our most recent post!
When two real estate investors/ wholesalers come together to find a distressed property at a low price, a real estate wholesaler agreement or a wholesale real estate contract will be required. The wholesaler enters into a contract with the seller to purchase the property, and then transfers or assigns ownership of the contract to the buyer. In essence, the wholesaler acts as a go-between between the seller and the new buyer, bringing together two people who might not otherwise have come into contact.
Contract Basics
There are many types of investor contracts available in today's investing world. Some people use a real estate attorney to draft and evaluate for you to ensure that all terms and clauses are legally sound and make sense for all parties involved in the transaction. Many investors use their State-created contracts. In Texas, we use the TREC 1 to 4 family contract. Even though numerous templates are available online, you should always have your attorney review your final draft. The contract will normally include the specifics of the property as well as the terms and conditions of payment. Everyone's roles will be clearly defined to ensure that there are no misunderstandings. The TREC contracts are uploaded to your member's area if you are a member of the West DFW REI Group.
First, a purchase agreement will be signed between the seller and the wholesaler, defining the terms of sale as well as a timetable for completion. Because of this contract, the wholesaler will have an equitable interest in the property, which will allow them to market and locate a buyer who will become the new legal owner of the property. It is the original seller's responsibility to hold the title until everything has been finished and all documentation signed. Once the contract has been accepted and signed, the wholesaler will then be able to present it to other real estate investors like you! Take care to ensure that you understand all the terms, contingencies, and conditions before you sign anything. A conventional purchase or sale contract between a buyer and a seller will be fairly similar to the portion of the contract that you sign. The buyer shouldn't expect too much difference from a regular real estate acquisition in terms of terms and conditions.
A Few Terms to Understand In the Contract:
- Parties – Buyer and the seller
- Description of the property – The property type, address, and legal description from your local property appraiser
- Purchase price – The price, deposit, financing terms, and any other financial items are included here
- Included property – Aside from the physical structure, this is for things like fixtures and furniture
- Property condition – A general description of the property at the time of sale
- Contingencies – If the property does not meet certain criteria after the inspection, the buyer is able to walk away from the deal
- Lead paint disclosure – This is standard in all real estate contracts notifying the buyer of lead paint in the home
- Deed Type – This clarifies the type of deed being conveyed to the buyer
- Buyers’ clause – Outlines the rights of the buyer during the sale process
- Sellers’ clause – Outlines the rights of the seller during the process
- Risk of loss/damage – Outlines what will happen if the property is lost or damaged before the sale has been completed
Timeframe
Wholesalers, like the team at TMC Property Solutions, work with homeowners in the Dallas-Fort Worth area who are searching for a quick and fair process to sell their properties. Many properties are often available, and if we do not have what you are looking for, we will work hard to find it for you! When we work with investors that want to acquire wholesale properties in Dallas Fort Worth, we typically can close on the property within 7-14 days after the investor's initial contact with us. As the buyer, it is your responsibility to ensure that you have the necessary finance in place and that you can close on the property within the timeframe specified in the contract. If you fail to comply with this, you may forfeit any money you have paid as a deposit which many times is non-refundable.
Wholesaling Houses Resources -
COMPS - Propelio
Motivated Seller Lists -
Propelio
Deal Analysis - RehabValuator
Other Local Resources
You can learn more about wholesaling houses during our periodic training that the West DFW REI Group holds. Create your free account here.
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