Posted by craig on February 06, 2004 at 13:57:22:
but what if you dont have the cash to buy, and were totally intent on flipping, and through bad luck or other reasons, you call everyone on your buyers list, but you just cant find anyone to flip it to?
Wholesale Experts… - Posted by Pam
Posted by Pam on February 04, 2004 at 20:29:48:
Hi-just getting started so excuse this generic question. But, if you put a property under assignment contract, can that contract have an escape clause, like subject to finding a qualified buyer? So…if you plan on flipping as soon as possible this would be an all cash deal correct? Thank you. AND one more thing…where do you find Board of Realtor contracts?
Re: Wholesale Experts… - Posted by Kawika Ohumukini
Posted by Kawika Ohumukini on February 04, 2004 at 21:50:48:
The best escape is a low earnest deposit. Just give them $10 and it won’t matter what happens. If it falls apart you just don’t eat out for lunch that day.
You’ll have the one’s that really count like rotten wood and title. They call the rest weasel clauses for a reason.
Re: Wholesale Experts… - Posted by Brent_IL
Posted by Brent_IL on February 04, 2004 at 21:43:53:
There?s no specific ?assignment? contract. Contracts are made assignable by the wording of the document or the application of state law. That contract can have escape-type clauses. A flip doesn?t have to be all cash. Wholesale rehab flips are usually all cash. L/O?s, wraps, PACTrusts, etc. are usually associated with terms. Your assignment fee is almost always all cash. You can find contracts that are used by REALTORS® at the office of real estate agents with a big R® in the front window.
more than lunch at stake… - Posted by Kristine-CA
Posted by Kristine-CA on February 04, 2004 at 23:03:12:
Kawika Ohumukini: With all due respect, I find it troubling that anyone would post advice regarding contracts, suggesting that the only thing at stake is a $10 lunch.
The seller’s have lives in which you become involved if you sign a contract that says you will buy their property. Weasel clauses don’t really matter–what matters is one’s word. Not making good on a contract is not a good pracctice.
I’m all for low or no earnest deposits–and I give as little as possible. But if I say I’m going to buy the property and sign my name, I think I’d better do that. And I’d sure like to think that my buyers feel the same way. Sincerely, Kristine
Re: more than lunch at stake… - Posted by Kawika Ohumukini
Posted by Kawika Ohumukini on February 04, 2004 at 23:58:00:
Not sure I follow you. Are you saying you’re okay with weasel clauses but you’re troubled by my comparing a $10 earnest deposit to the cost of his lunch?
Weasel clauses are unethical in my opinion.
Contingencies protecting the buyer from a house caving in on itself because of what you can’t see (rotten wood) or a bad title are perfectly valid.
Putting in clauses like “obtaining financing” or “my investor’s approval” simply don’t belong in this business.
How you can reconcile that weasel clauses don’t matter but integrity does matter is beyond me. You might want to think that one over.
Re: more than lunch at stake… - Posted by mikeW
Posted by mikeW on February 05, 2004 at 07:56:49:
What she’s saying is, putting down $10 and not performing is just as unethical as using weasel clauses. So in fact you are advocating the very thing you dislike.
Re: more than lunch at stake… - Posted by Kristine-CA
Posted by Kristine-CA on February 05, 2004 at 24:23:10:
Hmm. I never said weasel clauses were ok and I certainly don’t use them. What I was pointing out was what I perceive as in accuracy when you said that as long as the earnest deposit is low the only thing that was at stake was a $10.00 lunch. I think many sellers would find non-performance on a contract a little more troublesome–and they probably don’t give a fig about the buyer’s lunch (or earnest deposit). Most sellers go into contract and escrow with the intent, not just hope, of selling. I think that flipping educators out there would do well to remember that.
Sincerely, Kristine
Re: more than lunch at stake… - Posted by Kawika Ohumukini
Posted by Kawika Ohumukini on February 05, 2004 at 09:11:34:
You’re way off. The original post was about adding “escape clauses”. We all agree that low earnest is the way to go by her statement “I’m all for low or no earnest deposits.”
Let’s stick with the original post and how to help them and not mis-quote people.
Re: more than lunch at stake… - Posted by Jim (NJ)
Posted by Jim (NJ) on February 06, 2004 at 21:29:57:
Kristine,
Your values are admirable. I respect them completely. However for those newbies out for which I am one, the business of gettting started is intimidating enough without the holier than thou sermon about the ethics of this business. In virtually everything that is taught by the so called gurus and even on this board, the essential ingredient is to make offers, most of which will not be accepted. But if they were, there must be an out if the offer is somehow flawed even if due to inexperience. If you are saying that there is no room for weasel clauses, how are the inexperienced to begin? While there may be ethical issues here, how do you reconcile this dilemma?
Not meant as a criticism, only something that concerns me deeply as a newbie.
Jim (NJ)
Re: more than lunch at stake… - Posted by Kawika Ohumukini
Posted by Kawika Ohumukini on February 05, 2004 at 09:18:54:
I think I see your point. I don’t think the original post was talking about an escape clause for the seller, maybe that’s where the confusion is. I agree the seller has some risk but I believe it was a buyer’s question.
I’m trying to reduce her fears and desire to have escape clauses by encouraging the use of low earnest deposits to reduce her risk which you advocate as well so I don’t think there is any real disagreement.
Maybe I misunderstood you. What did you mean when you said “Weasel clauses don’t matter…?”
Re: more than lunch at stake… - Posted by gb
Posted by gb on February 05, 2004 at 08:05:02:
use this “subject to verification of info”.
Re: more than lunch at stake… - Posted by Kristine-CA
Posted by Kristine-CA on February 06, 2004 at 22:14:43:
Jim(NJ): I think everyone is on their own when it comes to decide for themselves what is an acceptable out. Things happen and sometimes people need to cancel contracts. The standard Realtor board contracts are full of contingencies and protect the seller pretty well, in my opinion. Add as many clauses as make sense to you. Joe Kaiser’s World’s Best Darn Document is a good place to start for ideas about disclosures and contingencies.
Not holier than thou, I think, but my point was to remember that you are messing with people’s lives when you sign a contract to buy their property. It’s not just about the contract, it’s about good faith. If you have a serious problem arise and you’re unable to fulfill your contract, of course your seller also signed a contract with full knowledge (hopefully) of all the contingencies and recourses if you do not perform. But what will really matter is how both the seller and buyer feel about the transaction at the end of the day.
Again, I really suggest that you use as many contingencies and take as much or as little risk as makes sense to you. There are investors who would never use a contract like mine as it’s not as comprehensive as others (or that Realtor board contract). There are investors and buyers/sellers who go without contracts altogether and use escrow instructions only on some deals. It’s all relative to what makes sense for you. I’m sure you’ve noticed that not all of your friends and family can feel the same about the risk involved in REI. It’s definitely a business for people who like to think for themselves. Actually, life is a business for people who like to think for themselves, but it’s very easy to get distracted. 
Sincerely, Kristine
Re: more than lunch at stake… - Posted by Kristine-CA
Posted by Kristine-CA on February 05, 2004 at 09:35:56:
What did I mean? I meant what I said–weasel clauses may protect the buyer (me) but they are a poor business practice. One should be intending to close, and be planning to do everything possible to do so. Not performing on a contract isn’t any more ok because the earnest money is only $10–that’s the same attitude as weasel clauses.
For me the low earnest deposit doesn’t make the deal any less serious. If I sign a contract and the sellers are expecting me to close, that’s what matters.
Sincerely, Kristine
Re: more than lunch at stake… - Posted by Kawika Ohumukini
Posted by Kawika Ohumukini on February 05, 2004 at 11:16:25:
I agree with all that so I’m not sure why you’re troubled. My original post stands; don’t use weasel clauses, do use a small earnest deposit. On that we both agree.
Now that I look back at the posts I think your error was in assuming I was implying she not intend to close when in fact it was the original posters implication. I was simply trying to steer her toward the light.
Now that we’ve thoroughly ripped apart the idea that someone would be crazy enough to spend $10 on lunch, you might want to go back and help the original poster with their question.