Tim Bell Contracts 4

Okay, so the next item on our contract here is number five. Okay? This agreement, subject to the buyer's inspection and approval of inspection and an acceptable title report with, as you can see, I've written in 21 days here. I like 21 days. Why? Because it gives us three weeks to go out and find a buyer for our property. This particular clause, number five here is what I call a universal weasel clause. It's a universal way to get out of the contract. Notice it doesn't say that it's subject to the inspection of a professional paid property inspector. That's not what it says. It says that it's subject to the buyer's approval of the inspection. Well, in this case, you are the buyer, which means you have the only say. You're the only one that can approve or disapprove that inspection. Theoretically, you could walk into that property, you could look around, you could take one sniff of the air and say, I don't like the way this property smells, therefore I'm canceling the contract. And you're perfectly within your rights to do so based on the way this is written. Okay? This is an important clause. Why? Because if you can't find a buyer, it allows you to get out of the contract. If there's any other problems, it can allow you to get out of that contract. Also, it gives you a full three weeks, 21 days to find a buyer for your property. Okay? It gives you all that time to implement those 11 different ways that we talked about to find a buyer for your property. So here's how this can be used. Okay? If it gets to be, you put the property under contract, it gets to be day 17, day 18, day 19, it's getting closer and closer to that 21 days. Then you can decide at that point, am I going to be able to find a buyer or am I not? And if I decide I'm not going to be able to find a buyer because it's not a good enough deal, or I didn't follow rule number one or whatever reason you can't find a buyer, you can always cancel within the 21 days. If you cancel within that 21 days based on the inspection, you'll even get your $100 earnest money deposit back. Woo hoo. Yeah. So you're not even risking that. Okay. If it goes beyond the 21 days, then typically your earnest money will become non refundable. It's called going hard. Your earnest money goes hard or goes non refundable and they're going to keep your $100 if you don't perform in those last 24 days that you have between on the 45 days to close. Okay? So I like using 21 days in here. Now, occasionally you might get some resistance from a seller on this. In many markets, real estate agents and many people will tell you that 15 days or 14 days or 10 days or even 7 days is a normal time frame for an inspection. I like using 21 days because it gives me more time to, to find my buyer and to check out the property. Now, sometimes you're going to get an objection from a seller on this. They might say, wait a minute, 21 days? That seems like a long time. I thought the normal was 14 days. Well, if they say something like that to you, here's how I respond. Well, you know, Mr. And Mrs. Seller, to be honest with you, this isn't the only property that I'm working on. Now, let's take a little aside. It shouldn't be the only property you're working on. If you're doing your real estate investment business the right way, you should have lots of properties in the process. You should have lots of properties you're looking at that you're working with, you're analyzing, you're making offers on. So you got lots of things going. So you need to indicate to the seller, look, this isn't yours is not the only property that I'm working on, okay? I'm a busy real estate investor. And the other thing is the person who's going to do the inspection for me, implying that you're going to have a professional paid property inspection done. But you may not the person who's going to do the inspection for me, they're an independent contractor. They're not my employee. I don't have total control over them. As a consequence of that, I'm telling you, I may need as much as 21 days, okay, to get this inspection done. I'll try to get it done sooner, but I'm trying to be honest with you to tell you that I may need as much as 21 days. Does that make sense? Yes, it does. Then sign the contract. Okay? That's what you do. Okay. Now, number six. The buyer and seller agree to pay normal closing costs as is customarily allocated between the parties. Now, you have to understand that in every market there are customary allocations of closing costs. There's the seller closing costs and the buyer closing costs. And there are customary or traditional allocations of each one of those costs for each party in a transaction. If you want to understand what Those are talk with your real estate agent or talk with your title company. Okay? They will be able to tell you what those customary fees are and who typically traditionally pays what. Okay? Now remember though, everything in real estate is negotiable. Every word, every period, everything in this contract and every other contract for that matter is completely negotiable. Okay? That's an important concept for you to remember. Write that one down. Everything in real estate is negotiable. Now if you, let's say that you need to change this. Remember the document that I sent you, the offer to purchase document, is just a simple Microsoft Word document, okay? It can easily be modified. If you don't know how to modify a Microsoft Word document, find a 13 year old and ask him to teach you. Okay? Anyway, so let's say, for example, it's a really, really profitable deal. And in order to push the seller over the edge and get them to sign, you have to agree to pay all of their closing costs. Could you do that? Yes, you could. Let's say it's a really thin deal, there isn't much profit in it. And in order to make it worthwhile for you, you need to get the seller to pay the buyer's closing costs. Could you negotiate that? Yes, you could. Okay. So all I'm saying is that number six is written as is traditional, normal or customary. Okay? You may need to modify it. Okay. Again, a simple Microsoft Word document, it's very simple to modify it. Okay. All right, number seven. Upon acceptance, the buyer shall have the right to immediately begin marketing the property and at the buyer's sole discretion. Now this is a little bit of a throwaway. It's not absolutely necessary, but it would be nice because remember, if you're going to wholesale this thing and you have the seller in place, that's the contract that we're talking about right here. But you don't have a buyer. Then you may need to advertise that property, the fact that that property is for sale, to find your buyer. Well, this particular clause, number seven gives you the right to, to start marketing the property. Now theoretically, if they sign this once it's under contract, once they've agreed, then you could go down to the party store and you could rent one of those inflatable gorillas, the 30 foot tall inflatable gorillas like they have down at the, down at the car dealership. You've seen the car dealership. Theoretically, you could rent one of those, stick it on the front lawn and be perfectly within your rights. Now please don't do that. Okay? Please don't do that. But you can do whatever you want to market the property.