Experienced real estate investors know that you make your deal
when you buy. If you pay too much or have not done your due
diligence research, that's tough, because you're stuck with the
deal after the close.
A buyer still has some wiggle room during the time the deal is
under contract. There are a few time worn "weasel" clauses used
by some investors. They will read something like, "Purchase is
contingent upon approval of buyer's attorney." Or a more
legitimate clause would be, "Purchase is contingent upon a home
inspection report submitted by a licensed home inspector and
approved by the buyer before the close. Inspection to be paid
for by the buyer."
To be safe you want to be the one who pays the home inspector,
so the inspector has no doubt about whom he/she is working for.
If the inspection indicates a need for substantial repairs the
buyer can reopen negotiations with the seller. If they can't
come to an agreement the buyer can simply disapprove of the
inspection report and there is no deal.
Of course, there are many other things that could legitimately
void a deal. How do you officially cancel a deal? Something like
the following statement could be submitted to the escrow officer:
1. The undersigned party hereby instructs Escrow Agent that
Escrow Number ___________ hereby is canceled as a result of a
Material Breach by the __________(buyer or seller).
2. The Material Breach is defined in lines ___________________
of the purchase agreement as follows:
_________________________________________________________________
___.
3. The Earnest Money is to be disbursed as follows:
________________________________.
4. The undersigned hereby affirms that I am not in breach under
the terms of the purchase agreement.
____________________________ (Buyer's Signature)
The contracting of any deal is important and it must be
carefully considered and executed. Experienced real estate
agents may be capable of doing it, but it is always wise to at
least have contracts reviewed by an attorney who specializes in
real estate. They are "wiggle room" experts.
About the author:
Mark Walters mentors real estate investors with free videos at
http://www.CashFlowInstitute.com
