$1 Earnest Money Deposit on REO Offer

[DemosL]

I belong to Peter Conti's Insiders Group. I saw a video of his the other day that mentioned I could put a $1 earnest money deposit on REO properties. Has anyone done that? I spoke to two local Realtors (that I thought I could use as Buyers Agents to present my offers) about the small deposit. They felt offers with such a small deposit would not get accepted.

Since I'm a wholesaler, I would want to assign my REO contracts to other investors. They didn't think this would fly either.

I have nothing to lose by making offers with ridiculously low earnest money depoits and assigning the contracts to other investors, so I started contacting listing agents with my initial offers. We'll see what happens.

[JaredfromIndiana]

I bet I know what happens.  You get zero response.  If I was selling a house and somebody came to me with a $1 earnest money check I wouldn't even look at their offer or take them seriously.  You do have a lot to lose by doing what you say you are going to do, you won't be taken seriously and get a bad name QUICKLY.

Take some time and read in the wholesaling forum here, both of your questions have been discussed in length already.  Good luck!

[DemosL]

Thanks for the reply. I do know that $1 and $10 earnest money deposits (EMD) are accepted a lot for non-bank owned properties. This is probably not the case for bank owned ones. First, I have to have an offer accepted before I have to worry about the EMD on the contract.

[JaredfromIndiana]

Actually no, you need to send a check or a copy of a check for earnest money with your initial offer.  Again, if they see a check for $1 they will not respond. 

[Roger J]

No other way to say it.  You will be seen as a joke, a person that has no knowledge of how the system works and a complete waste of time for the agent(s) involved.  When you do finally learn, you will have burned some major bridges that likely won't get rebuilt.

And you cannot assign a REO contract.  Most standard state contracts specifically forbid assignments without the seller's written approval and the banks usually require that their P&S contracts be used, which state that you CANNOT assign this contract.

Raj

[tampasteph]

I agree with the above.

Sure, you can offer a dollar as your deposit, but you will have a really hard time being taken seriously. 

Most  banks usually want to see at least 1k (although I know some people who put down $500). 

I have gotten away with putting only a few bucks down on a homeowner deal, but I would not try that with an REO.

Good luck,
Steph

P.S.
I find it kind of disturbing that they are advising you to do that.  Are you paying to be a part of the Insider's Group?