Re: Be careful. - Posted by Stacy (AZ)
Posted by Stacy (AZ) on October 23, 1998 at 16:28:13:
There are agents that will not pre-qualify you. This sounds like it may be the broker’s policy at that office.
But, there’s another consideration. A few weeks ago I posted a question regarding the ability to close. I focus on flipping wholesale, as well, and I was concerned that I knew from the get-go that I had no intention of closing on the properties I was placing under contract. What was I planning to do if I couldn’t find a buyer to flip to before my contract expired? Well, I was planning to allow the contract to expire and move-on to the next property. As far as I was concerned, my contract held the damages to my $100 earnest deposit, so what’s the worry?
I’ve since been enlightened by the experts on this newsgroup. First, letting the contract expire jerks people around. They think they’ve sold their property and are moving on, and then the floor gets taken out from under them. Plans go on hold. And, even with the appropriate weasel clauses in the contract, there is still a chance of getting sued for specific performance.
Second, not living up to your contracts can spoil your reputation in the local marketplace. That could be the most damaging of these effects.
So, now I will only place properties under contract if I could close on them myself, or if I am absolutely sure I’ve got a good buyer to flip to (good buyer meaning one that I know will close). This is more challenging, but at least I can sleep better at night.
There are other ways, such as using a contract for deed instead of a purchase contract, and also just being up-front with the sellers about what you are going to do and the risks of not finding a buyer.
Luckily, I’ve always closed on my flips so far. But I’m glad I got the advice before I got myself into a jam. Maybe in your case you have some good buyers you are working with. If so, your ability to close on properties yourself is not as important.