Escape Clause

[THATREIGUY]

    sweet   

[Bay Area Brian]

javipa

Too bad you didn't have your mother appeal the decision. In many jurisdictions the small claims court judges/ commissioner have as much legal training as my cat, and their decisions are based on how they feel about things. I've lost 2 solid small claims cases, but as the defendant I was allowed to appeal, which overturned the "judge". In one case I had to appeal, the original decision seemed to be based on the plaintiffs plunging neckline and a coy delivery of her case.

[Bay Area Brian]

A couple more comments. First I hate the partner thing unless you really have one in which case I note the partners name in the offer.

In the old days before he died my older brother was that person, now days it's my wife. I would hate for it to end up in court and have to bring in my cat. Plus when a judge hears the answers to questions like how many deals have you done together etc. avoiding perjury is a tough one.

Secondly, often times a seller can keep the money by giving an option and not earnest money, and when the buyer balks he's legally only in the position of having a option expire and he can ask for refunds for forever. Other words be ready to forfeit earnest for bogus escape clauses or make the earnest money a small amount so basically an option.

[javipa]

Bay Area Brian,

If I had known better, I would have tried to help my mom appeal that decision.  But I didn't know what I was doing, as in "I".   So my mom lost the sale and a few hundred dollars and a ding in her credit.  It made us sick to say the least.

Meantime, I love your "option" alternative.  I would imagine this would be more workable when there is a buyer's frenzy.  Otherwise, it might be a hard sell to get the buyer to cough up what is effectively a non-refundable deposit, in the form of option consideration... 
 

You sound a lot like Barney Zick... 

[guagsh]

I am responding to a reply message by javipa.  Normally, you have a 10 day due diligence period at which time you can legally back out of the purchase...at least on the contracts I have used.  Reasons would be you don't qualify for a loan, sales price above appraisal, etc...

[shortsaleking]

the escape clause needs to go on the purchase and sales contract. I usually put " this is subject to business partner's approval. "

[idhomebuyer]

    ~ I had to doubletake that. Are you doing this on foreclosures listed with agents, & bank reo's? Have you tried the contingent on finding a buyer clause with FSBO's and does it work? If so, what do you tell them? Thanks, Bennett.

I don't pay an earnest money deposit if at all $100 tops. I wholesale REO"S using realtors, telling them upfront what I'm doing. Make sure contract is assignable, and always have contingency clause stating purchase of this property is contingent upon finding a buyer.

[mronhifi123]

Thanks for the suggestions.

[James082]

The "subject to partners approval" and financing conditioning are good clauses.  I usually use an option.  I am straight forward with the sellers about the option and even have language that states that the option can be extended by x days for $x and the money is to be paid at closing.

[xpandergt]

I use to rely mainly on the inspection clause as my out, but now I mainly use the financing clause. Most home owners know that the banks are much stricter on their lending then they were during the boom times. Using the financing clause is also the best way to try and get a price reduction on the property  if you can't find a buyer at the current price.