First Deal First Paperwork

[cmattric]

Hi everyone,

I am going for my first deal today. I will probably sign paperwork with the seller. This is an agreement for sale deal.
Seller wants to get a down payment (two months later), and I start paying his mortgage after two months.

Now this is great deal and I want to tie-up the seller initially. I know we have many documents to fill-out after I attend Barry`s seminar, but just to start what document I should bring with me today.

Another question, the house is listed with an agent. The seller agrees to remove listing. If I sign today, will there be a problem. Should I wait until the listing is removed (considering $80K equity )


Thanks in advance

 

[tonypeters]

Mehmet, I would start by requesting a copy of the "listing release" from the real estate agent.

The last thing you want to have to do is cough up commission to a realtor after the fact. As soon as you receive verification that he or she has released their interest you need to get the AFS signed. Now this is assuming that you have performed all of your due-diligence and you have NOT made ANY promises that you cannot keep and you have figured out your "EXIT" strategy.

Hope this helps?




QUOTE (cmattric @ Nov 26 2009, 09:14 AM) Hi everyone,

I am going for my first deal today. I will probably sign paperwork with the seller. This is an agreement for sale deal.
Seller wants to get a down payment (two months later), and I start paying his mortgage after two months.

Now this is great deal and I want to tie-up the seller initially. I know we have many documents to fill-out after I attend Barry`s seminar, but just to start what document I should bring with me today.

Another question, the house is listed with an agent. The seller agrees to remove listing. If I sign today, will there be a problem. Should I wait until the listing is removed (considering $80K equity )


Thanks in advance

 

[cmattric]

Thanks Tony your recommendations are "Gold" for me.

I have two possible exits already. Due dilligience is performed

1. I will go and get a verbal agreement
2. Receive release of listing
3. Prepare all the paper work at once
4. and let the rest flows

But still a question though, what will be the one paperwork to tie-up the propery next time if its not listed? Not to piss-off my lawyer, after we start paperwork suddenly the seller back-out the deal.

Thanks again


QUOTE (tonypeters @ Nov 26 2009, 09:26 AM) Mehmet, I would start by requesting a copy of the "listing release" from the real estate agent.

The last thing you want to have to do is cough up commission to a realtor after the fact. As soon as you receive verification that he or she has released their interest you need to get the AFS signed. Now this is assuming that you have performed all of your due-diligence and you have NOT made ANY promises that you cannot keep and you have figured out your "EXIT" strategy.

Hope this helps?

 

[RedlineBrett]

QUOTE (cmattric @ Nov 26 2009, 10:14 AM) Hi everyone,

I am going for my first deal today. I will probably sign paperwork with the seller. This is an agreement for sale deal.
Seller wants to get a down payment (two months later), and I start paying his mortgage after two months.

Now this is great deal and I want to tie-up the seller initially. I know we have many documents to fill-out after I attend Barry`s seminar, but just to start what document I should bring with me today.

Another question, the house is listed with an agent. The seller agrees to remove listing. If I sign today, will there be a problem. Should I wait until the listing is removed (considering $80K equity )


Thanks in advance

The listing brokerage will have a 3 month holdover clause. That means that if the seller sells within 3 months of the listing coming off the market the listing brokerage is entitled to their commission. If this happened with one of my listings I would definitely sue the seller for my fees + legal expenses and see how it plays out in court. The seller is better off disclosing things to the listing brokerage rather than trying to cut their realtor out of the deal. Brokers generally know very good lawyers and can get pretty vicious when people try and cut them out of their paycheques! If the listing is not getting any action the realtor will probably settle for a much smaller cheque and be done with it anyway.

But this isn`t your problem it is the sellers... play your side of the deal and if the seller has to pay out the realtor let them worry about it. Agreements for sale can still be done through listing brokerages so if the seller chooses to keep his agent involved you would be well served to bring your agent in too to make sure the contract is done the way you want it to be.

 

[tonypeters]

Mehmet, I am glad to hear that my advice was of benefit to you.The answer to your question ultimately depends on a variety of circumstances. As I always say, there are a number of ways to "ENTER" a real estate transaction, just like there any number of ways you can "EXIT" a real estate transaction.

So what I am trying to tell you is this; there is no "stock" answer to your question. The BEST thing you can do for yourself is to understand all of the creative "ENTRY" and "EXIT" options that are available, and what documentation you will need to support each transaction.

This is another reason why I recommend that investors EDUCATE themselves BEFORE they venture into the "Creative Real Estate Investing" arena, as it has the potential to be a minefield!

I hope my feedback is of further assistance to you?


QUOTE (cmattric @ Nov 26 2009, 09:39 AM) Thanks Tony your recommendations are "Gold" for me.

I have two possible exits already. Due dilligience is performed

1. I will go and get a verbal agreement
2. Receive release of listing
3. Prepare all the paper work at once
4. and let the rest flows

But still a question though, what will be the one paperwork to tie-up the propery next time if its not listed? Not to piss-off my lawyer, after we start paperwork suddenly the seller back-out the deal.

Thanks again

 

[BarryMcGuire]

Hi Mehmet. Once you work your way thru the Realtor issue and you are ready to sit down with the seller, what you need are the " front end " documents. Those are the documents that let you write up an AFS deal. Very similar to how you write up any deal that is seller financed. You need:
1. a basic AREA contract
2. add the AFS clause to the terms section of the contract that turns the deal into an AFS deal. To see how to handle 1. and 2. , refer to your Deal Ready Documents binder that you got at the Focus Workshop at page 172-173. I also had that clause and how to use it in the Ron LeGrand handout for anyone who was at Ron`s event.
3. Complete an AFS financing schedule. That schedule is found at page 174 and on your documents CD . Modify the schedule to fit the terms of your particular AFS.
Get the paperwork signed and Voilà ! , now you have an AFS contract.
4. Once the contract is signed and unconditional, you or your realtor get it to your lawyer and the lawyer takes care of the " back end " documents like the 20 page AFS agreement.

Hope this helps

Barry

 

[gkeary]

Hi Barry,

Sounds like people got some really good info from your workshop. Too bad I`m in BC

There is one thing I`m still a bit confused about. If I were doing a straight cash buy for a discounted house I remember Ron saying don`t try to do a "tabletop" closing. So if you meet with the vendor because you have reason to believe this is a good deal and it turns out to be, what do you have them sign so there is a committment to work with you?

If it`s a standard purchase and sale agreement what about witnesses?

Thanks for sharing your knowledge so freely Barry.

Gail