Tim Bell Contracts 1

Now one of the big questions that people always ask is which contract should I use? Now remember, my motto is to keep it simple. And so we want to make it simple for you. I want you to think about it in, in just two simple terms. Number one, if the property is listed with a real estate agent or it's a bank owned property, in other words, it was a foreclosure property, the bank foreclosed on it, they now own the property. Sometimes you'll hear them called reo real estate owned, that's a bank owned property. Or if it's a short sale property, so listed with a real estate agent or bank owned or short sale. Now a short sale property very simply is a property where the seller owes this much, I am willing to pay this much, and there's a gap between what I'm willing to pay and what they owe on the property. Okay? So in that case, what we're doing is we are asking the lender, or the seller's asking the lender to forgive a portion of the debt. Forgive is the wrong word. But forgo receiving a portion of their debt, that's what a short sale is. Okay? And so if it's listed with an agent or it's bank owned or it's a short sale property, we must use the standard state approved contract. Now, every state in the United States has a standard state approved contract. It is designed by the legislature in conjunction with a bunch of real estate attorneys and it is designed and provided for use by real estate agents. See, real estate agents can't legally write a contract from scratch. You have to be an attorney to do that. Well, real estate agents are not licensed to do that. And the only thing they're licensed to do is fill in the blanks on the standard state approved contracts that are provided for them by the legislature and the legislature's attorneys in that state. So, so that's what I'm talking about when I say the standard state approved contract, the one that's designed to be used by real estate agents and the one that real estate agents are actually required by law in your state to use. Okay? Now if the property is not listed with a real estate agent, it's not a bank owned property and it's not a short sale property. You can use anything you want. Okay? You could sit down with the seller at the International House of Pancakes and you could pull out a maple syrup stained napkin. You could write out some things on that napkin. You could write things like the property address the price, the parties, the seller, the buyer, a Closing date and a few other minor details you could put into that onto that napkin. As long as both of you sign it. That napkin is now a legal binding contract in the United States of America. Yes. So now obviously that's not the best choice. I'm not going to suggest you do that. I would never suggest you do that. I'm going to show you something much, much better. Okay. But understand that you can use anything you want. If it's just you and the seller sitting across from each other at the kitchen table. If there's no agent involved, you can use whatever you want. I'm going to show you two really good examples of that. Whatever you want. Now I'm sent this to you. You have the, the blank version, which of course you can use if you wish to, or you can use the filled in version. Now we're going to go over the filled in version now so that you can see how that looks if you look carefully. This prints out on 1-8-2-BY11 page. Yes, 1-8-2-12 page. Now compare that to most standard state approved contracts. You're going to find that on most standard state approved contracts they're anywhere from three or four up to 13 or more 17 pages in some states. It gets crazy with the standard state approved contracts. I suggest that when it's just you and the seller and there isn't a real estate agent involved, you should use my simple one page contract. The reason is, is because state approved contracts, as you can see here, here's an example of one from Texas. You can see that it's, it's this one is only about four or five pages but you can see it's completely jammed and completely full of legalese mumbo jumbo and fine print. Okay. Again those types of things tend to scare people. They tend to concern sellers. When you're trying to buy the house. As a consequence, I recommend you use the simple one page agreement. You can see on this one page agreement that there are only nine provisions here. Only nine. And there's a lot of white space and there's no fine print. As a consequence, it's much easier to get a seller to sign this because it's much simpler. See in many cases if you pull out the 17 page Florida contract for example, and you put that in front of the sellers, their eyes are going to roll in the back of their head and, and they're going to do one of three things. They're going to number one, refuse to sign or number two, they're going to take it to their attorney and have their attorney check it out. Or number three, and this is the worst, they're going to take it to their brother in law who's a real estate agent. Now typically, obviously if they don't sign, that's not going to work for either one of you. If they take it to their attorney, their attorney may try to punch holes in it. Their attorney may try to, may try to discourage them from selling you the house. Well, obviously that's going to be a problem for you. And then the last one of course is the worst one. Them taking it to their brother in law who's a real estate agent. A real estate agent may say to them, what are you doing? Why are you selling your house to this person? I can list your house for sale and get you a lot more money. Okay? That's the type of conversation the brother in law real estate agent is going to have with that seller. Again, all three of those circumstances do not work out for us in our wholesale deals. So that's why we bring the simple nine item, one page contract. Why? Because it's very simple, it's very clear and often you can get people to sign it without having to refer to their attorney or refer to their real estate agent.