Earnest Money Agreement - Posted by Willis Smith

Real Estate Investing Real Estate Law
1

Posted by JHyre in Ohio on September 10, 2002 at 06:29:49:

That’s what I’d do…and its recycleable…usable for deal after deal.

John Hyre

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Earnest Money Agreement - Posted by Willis Smith

Posted by Willis Smith on September 09, 2002 at 16:21:28:

Hello,

Thank you in advance for your answer.

Here’s the question -

I’m buying REO real estate property and I have a partner who is putting up the earnest money (Around $500 per property) for a $1,500 profit at closing. I will be doing a double closing or a flip (me and my seller and my buyer will close at the same time).

I need some kind of document that will insure or secure my partner’s earnest money and profit. Since I’m doing a double close I won’t be on title. Is there some kind of lien document (indicating how much I owe him), my partner can either record or send to the title company along with his earnest money, to file with the closing documents? Or some kind of agreement we can sign and record, so when the closing takes place, that document will show up as a payoff?

Thanks,
Willis Smith

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Re: Earnest Money Agreement - Posted by Kevin Hudson

Posted by Kevin Hudson on August 14, 2007 at 18:17:37:

I recently put up $500 in earnest money on a property when I wrote a contract on it. Upon inspection, the roof needed to be replaced. It was supposed to be replaced by a licensed roofer chosen by the seller. This was not done. The roofer was not licensed. Now neither the seller nor his agent will sign the release form in order to give me my earnest money back. What do I do?

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Re: Earnest Money Agreement - Posted by Tony-VA

Posted by Tony-VA on September 09, 2002 at 17:27:05:

Willis,

You state that you are doing a double closing. Then you state that you will not be taking title. You lost me here. If you are doing a double closing, are you not taking title (if only for a moment) and then transfering title to your buyer?

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Re: Earnest Money Agreement - Posted by Nate(DC)

Posted by Nate(DC) on September 09, 2002 at 17:22:04:

Why not have the contract written up in the name of an LLC owned by you and your partner? The LLC documents could specify that he gets the first $1,500 of distributions and you get whatever else is left.

That would be the easiest way I can think of to do it.
(Note that I’m not a lawyer and this is business, not legal, advice).

NT