Speaker 1: Due to several requests on today's video, I'm going to do a tutorial on exactly how to fill out a real estate purchase and sale agreement and specifically what you need to include to make sure the contract favors you, the investor. Now, this is a video you don't want to miss because I'm also going to show you how to fill it out digitally in minutes so that you and the seller can sign it electronically, making it completely paperless, not to mention easy and convenient. I'm also going to share with you how to get my contracts for free, all of that and more coming up. Hi, it's Gerry Norton, the nation's leading expert on flipping houses, and if you're new here to make more money in less time flipping houses so you can live your dream life, subscribe to my channel, click the bell icon to get notified when new videos are released. Okay, here it comes. I am not a lawyer, nor am I giving legal advice. You are a big boy or a big girl. You are responsible for your actions, so always seek competent professional legal advice before buying and selling real estate. As a house flipper, after you've gotten a lead and you've crunched the numbers, it's time to present a written offer to the seller. Now, this is called a lot of different things, but the most common is a purchase and sale agreement. Now, it's a legally binding contract that commits the seller to sell you the property and prevents the seller from selling the property to anyone else. So it's kind of a big deal, and whether you're going to fix and flip the deal or wholesale it, the purchase and sale agreement is the same, and in the beginning, when you're new, it can seem overwhelming or intimidating, at least it did for me. However, once you understand the mechanics of the contract, it's actually pretty easy, which you'll see in a minute. Now, before we dive in, there are a few things you need to know right off the bat that are important to understand. First, real estate is governed and regulated state by state. That means the contract law varies from state to state, and that means the contracts themselves are going to vary from state to state. Now, licensed real estate agents are required to use their state-approved contracts, and so if you are ever making an on-market offer where there are real estate agents involved, you don't need to worry about providing the purchase and sale contract. They will do that. They will even assist in filling it out, but you still need to understand what you're filling out and what you need to include, which we'll cover on this video, so keep watching. Now, if you're not licensed and if you're dealing directly with an off-market private seller and there are no agents involved, then you don't have to use the state-approved contract necessarily. You can if you'd like. In fact, just Google state-approved real estate purchase and sale agreement in your state, and you can probably find a free PDF version, but you could also come up with your own contract between you and the seller, which I'll show you how to get my purchase and sale contract for free, so stick around. The reality is you could write a contract on a napkin between you and the seller, and that be considered a binding agreement, so let me make sure I'm clear here. If the deal is on market, the agent will provide a state-approved contract. If it's off-market, it doesn't have to be a state-approved contract, and you'll need to provide your own since a seller isn't going to have one. Now, as a real estate investor, you always want the contract to lean in your favor. That means when you're the buyer, you want a buyer-friendly contract with clauses that favor you, and if the role's reverse and you're the seller, you want a seller-friendly contract. In this case, since we're talking about getting contracts from motivated sellers that you can flip for profit, you want a buyer-friendly contract, so let's jump in and take a closer look at the paperwork as well as what buyer-friendly clauses you should include and some other cool tips. Now, for the demo, I'm going to use my purchase and sale agreement that is just one of the dozens of tools included with my Flipster deal management system, and if you've never heard of Flipster, I'll tell you more about it in a minute, but what you do is first, once you get logged in, is you're going to go to the Offer Generator Pro, which is the contract builder tool. Click Add New, then choose a property from your drop-down menu. Now, before we start going through and filling this out digitally, notice there's this little I for information. Now, if you hover over it, it will give you a prompt as to what goes in that field. Okay, so the first thing that you usually see is information about the parties involved, meaning the buyer and seller. Now, a little trick here, where it says seller, I normally just put owner of record. That makes it really easy to fill out. Same thing for the seller's address. I'll put address of record. Now, buyer is where you'll put your name or entity, and you could add after your name and or a sign, which means you'll buy it or anyone else that you assign the contract to. This is a wholesaler thing, but it's unnecessary since the contract is already assignable. You don't need to add and or signs, so why raise any red flags with the seller? Next typically on a contract is the property address. Sometimes it will ask for the legal description. I normally don't worry about that, but you could Google it, or you could get a title or real estate agent to provide that. Now, some contracts have a clause for personal property. This would include anything you want included in the sale that is not fixed to the house, for example, appliances. Now, my rule of thumb is if there is anything there of value, I ask for it. I once asked for a car that was in the garage. It looked like it had been sitting there for a long time, so I added that to my contract under personal property, and the seller agreed to it. Okay, next is price. This is where you put down your offer price and usually the amount of earnest money. Now, on my contract, I actually have two options for earnest money because sometimes I'll offer a really low earnest money to put down up front and then a bigger earnest money later after the inspection. The reason why I do that is because immediately after getting an executed contract, I'll find a cash buyer and I'll get a big earnest money from him or her, which I'll use to pay my additional earnest money. Next is how you're paying for it. Maybe it's just cash, even if you're using private money or hard money, but if you're getting financing, include the minimum requirements. Now, keep in mind, this is a contingency that protects you. If you don't get the financing as described here, then you come back out of the contract. Number seven here is basically your as is clause. This looks differently on some contracts, but basically you want to let the seller know that you're buying the house in its current as is condition and not requesting they make any repairs. Number eight A here gives you a window of time to do an inspection. This doesn't necessarily mean that you have to hire a professional inspector. It just means that you have a window of time to perform any due diligence and make sure the deal works. Now, if you discover something or realize the repairs are more than you anticipated, you can back out of the contract during the inspection time without any repercussions. So rather than putting a date, instead I write 10 days from accepted offer. That makes it easier to fill out the contract and it means you don't start on the clock until all parties have signed. Now A B basically says if there are any issues that you request the seller to take care of, he or she has a deadline to respond. Now this usually isn't applicable because you're buying the property as is and you're not going to be asking the seller to fix anything. Number nine is lead based paint clause. Now those are standard. Make sure you learn what the rules are with homes built pre 1978. Number 10, this is the closing date. Again, rather than putting a date, I always put down 30 days from accepted offer or how many ever days you need to close. Numbers 11, 12 and 13 all have to do with the title and making sure you get a free and clear title with a warranty deed. Now all you have to do is put the state where your deal is located in these three blanks. 14, 15 and 16 are all legal things that is pretty standard. Number 17 is if there are any agents involved, which like I explained in the beginning, usually isn't the case. Otherwise you'd be using their forms. So just put an A. Number 20 is if you wanted to include any addendums to the offer. Now 21 is where we want to include some things that are in our favor. So if there's not a specific clause for these items, then wherever there is a blank spot, write them in. First is specifying who you want to use for the title closing or attorney depending on what state you're in. We want to make sure that the closing happens with a investor friendly closer, especially if you're wholesaling. So put closing to take place at, then fill in the blank with your title company. Number two is making sure you get access to the property. If it's vacant, put buyer permitted access to property via a contractor lockbox. This will allow you to show the property to cash buyers if you're wholesaling. And if you're fixing and flipping, this will allow you to get bids and plan your rehab. If it's occupied by the homeowner, put seller to give access with 24 hours notice to show property to others. Number three is if you're going to wholesale your contract, add a clause to have the right to advertise. Put down buyer permitted to advertise the property. And the fourth clause is closing fees. If you committed to the seller that you would pay all the closing fees, then add buyer to pay all closing fees except any outstanding property taxes or liens. Now let's go to 23. This is important because it says that an electronic version is acceptable and binding. This is important because we send this document via email for digital signatures, so there's no printing or scanning needed, and it makes it super easy for the seller to sign. I'll show you in a second. Number 27 is important because it forces the seller to respond to your offer by a certain timeframe. I normally put one day or two days. Now once this is all filled out, you want to click save. Then when you're ready to send it to the seller, check this out. Click sign and send this agreement. Next follow these instructions. First double check and make sure you have everything you want in it. Do it again carefully and make sure you didn't miss anything. Then add the name and email of the other party that should sign this document, the signee. Next is where you sign the document. Click start and add your initial. Then you're going to sign it. Then just click finish, agree, and now it's ready to send to the seller. You can see it pre-filled out an email that's going to go directly to the seller, and then you just click send. Congratulations. You've just sent the contract over to the seller to sign. He's going to get it via email so you can follow up with him, make sure he got it. He'll be able to sign it just like you did digitally and send it right back to you. Once you get it, it'll notify you in the system and you'll have that executed contract now saved digitally inside your Flipster system so you can store it, track it, manage it from there. It even allows you to send reminders just in case they don't get it or they don't send it back right away. You can send it again as a reminder and make sure that they sign that. Now if you'd like a blank PDF copy of my contract, I'll give that to you for free. Just click the link in the description. But if you want the Offer Generator Pro software where you can create your purchase and sale contracts digitally, save them, and even send them for electronic signatures, then you really should get my all-inclusive house flipping deal management system called Flipster. Now if you've never heard of Flipster, not only does it create your purchase and sale contract, but also your assignment contract for wholesaling, along with dozens of other tools to help you organize, streamline, and automate all of the steps of flipping houses, including finding and funding deals. So if you're looking to do your first deal or you're doing deals every month, Flipster can take you to the next level. If you're into flipping houses, you owe it to yourself to check it out. To learn more and see it in action, just go to GetFlipster.com or click the link in the description. If you learned something on this video, show some love, hit that like button right now and leave a comment. Let me know your biggest takeaway from this video. I'd love to hear from you. And if you haven't yet, be sure to subscribe to the channel. I'm dedicated to helping you make more money in less time flipping houses so you can live your dream life. And while we're on the topic of paperwork, once you have the purchase and sale agreement executed with a motivated seller, if you're going to wholesale it to a cash buyer, you're going to need an assignment agreement. So watch this next video to learn how to fill that form out and to get it for free. So watch that now and remember, it's not about the money, it's about having the time and freedom to have, be, do and give everything you want in life. That's what it's all about. And I'll see you on the next video.