Wholesaling real estate has become a popular concept in today’s real estate business. However, many are still not aware of what it actually comprises. Wholesaling a real estate essentially consists of owning or controlling a real estate property at a significantly low price and then selling the same asset for a profit to a resident or an investor. If you Click Here, you can see how the www.huffingtonpost.com has predicted real estate wholesaling to be one of the sure shot ways to move up in the world. Since you will be having equitable rights to the property according to the contract agreement, you don’t need to put up any money of your own, making it financially safe for you as well.
After a real estate property has been under contract, the option agreement lets the wholesaler list this property to their buyers. Once an interested buyer approaches, all the wholesaler has to do is sign over their rights to the buyer. The transfer of this tangible asset allows the wholesaler t actually make a profit without investing a single penny. The wholesaler can be paid either by ‘assigning’ the property or choosing a ‘double close.’ If the profit the wholesaler makes is less than five thousand dollars, the contract is assigned. This means that the wholesaler is assigning the right to buy the property over to the new buyer. The buyer will be paying the wholesaler an assignment fee for this to happen. In the double closing method, involves doing the closing from the seller’s side as well as the buyer’s side. Since the seller is offering the property at a significant discount and the buyer is buying it for a discount, the wholesaler gets to make whatever is the difference between the significant discount and the discount. Interestingly, neither the seller nor the buyer is aware of how much the wholesaler stands to make in this case. However, the work done by the wholesaler is considerably more.
A common query that newcomers in the real estate wholesaling business have is whether they can use the standard contract while conducting the deal. The answer is yes, as long as you do not forget to include a few clauses to protect yourself as the wholesaler in the deal. Experienced real estate wholesalers recommend using the standard contracts with the amendments in order to assure the sellers that the deal is in the clear and that you have not taken any undue advantage of them.
Some of the clauses that you can include in the standard contract are that help protect your money. The escape clauses can assist you to back out of the deal if you need to do so later on. There also needs to be a clause indicating that you are an investor and will be making a profit from this deal. Another important clause to include is the fact you are not in any way loaning the buyer any money. At the end of the day, once all the clauses have been put in the contract you can have it looked over by an attorney to ensure that all your bases are covered.