Nathan Payne explains how wholesalers use a cloud clause in contracts to stop sellers from backing out at closing. The tactic asserts your right to buy or assign the property, but only works if you already have a buyer lined up or plan to buy it yourself.
We're just trying to get the deal done and get the seller out of the situation they're in. And the wholesaler is totally cool with it. He's like, yeah, man, I'm not here to screw anybody over, but when we had brought a buyer to the deal and we were ready to close, she didn't want to close anymore. So we just clouded it. I said, hey, I've been there, done that, totally get it. Let's get it done. So this is a good thing to do when sellers that agreed to something change their mind, but you don't cloud every deal that doesn't work out. Especially you don't do it on deals that you don't have a buyer. I only obviously do it for deals where I have a buyer, I'm gonna buy it myself, okay? So you wanna make sure this language is in there and it's gonna protect your deals. And again, I have countless numerous stories of people trying to back out the day of close saying, "Oh, I changed my mind." And all I do is I say, "Hey, totally get it. You signed an agreement saying we have the rights to buy it. We'll just be ready when you're ready to sell." And then they're like, "Whoa, whoa, whoa, hold on." and then they end up closing, okay? So make sure to add that in your agreement. Let's do a quick recap. The real estate purchase contract, a wholesale contract, is pretty simple, okay? It's just an agreement that states that you're buying the house and it gives you the ability to assign your rights to buy it to someone else for a fee.
Why Traditional Wholesaling Keeps Failing You (Use This Pre-Flip Method Instead)
