Offer subject to approval of partner

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How do I do a deal subject to the approval of my business partner(legal way to cover myself)? Also, if I make an offer to tie up the property do I have to make a down payment, or do I have, say a month or two to flip the property before using any of my money? I hope you nice people can help as these are my main obstacles to success in real estate. I have yet to do my first deal. Thanks so much!

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  • DaveT13th February, 2003

    I suppose you could always write a contingency in the special provisions area of your offer. Words similar to "This offer contingent upon receiving written approval from business partner within 10 days of acceptance."

    I think using this language, however, just raises a red flag for the sophisticated seller. This language suggests that you are just a frontman -- that you are not the decision maker. If I were a seller looking at an offer with this language, I would refuse to accept. I would tell you to just have your "business partner" submit an offer, but in the meantime the property stays on the market.

  • Coolage15th June, 2003

    Subject to buyers partner(s).
    Is misleading in a contract with a seller.
    Unless both you and your partner are going to sign and date this contract together.

    I also thought this would work until my attorney clarified with me. Go for it u still have maybe 3 subject to's a seller might not disagree to.
    Hope this helps.
    IF im wrong please someone correct me.


  • rajwarrior15th June, 2003

    DaveT is correct. 'Subject to partner's inspection and approval' would be a red flag for most sellers. Also, you need an actual partner (co-signer) for this to be a legal contingency.

    A better contingency clause is 'subject to the BUYER'S (ie you) inspection and written approval within 14 days.' Written carefully, it doesn't require a professional appraisal and it gives the seller some freedom as well. You have to commit in 14 days or the home goes back on the market.

    The best contingency IMO is the 'subject to acceptable financing' (in most RE agents PC contracts). In it you list the % of the loan amount, acceptable interest rate and terms.


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