Typically a hold harmless agreement is between a buyer and seller and the intent is to pass on any liability associated with the property to the buyer.   It is important to read the agreement before signing it as you need to understand what you could be getting yourself into after you own the property.

These agreements are usually between a seller and his buyer but they can be between a seller, buyer and the closing agent.  In this case the closing agent, often an attorney, wants a hold harmless to cover him from any liability in the future – even if he was at fault.   This may indicate an attorney who is more interested in his covering his butt than the best interests of his clients.

Most often the hold harmless is used to actually transfer responsibility from the seller to the buyer with both parties being aware of the reason for the agreement.  The reason that is most common is a code or lien issue that will take weeks or months to resolve and the new buyer will have to pull new permits or resolve the issue after he is on title.

This is important that the new buyer actually talks to the city or county and understands what his liabilities actually are or he will bolt from the closing.  Most new investors will run from these properties and lose probably millions of dollars in profits every year with no reason it should happen.  If you are faced with a Hold Harmless signing do your research on the property and know the specific reason for the agreement.

In most closings of foreclosed properties (REOs), the closing agent not only represents the former lender but also actually did the foreclosure.  The closing agent will have you sign a hold harmless agreement nearly all the time.  The reason is that they don’t want to be liable for procedural mistakes in their foreclosure proceedings that could give the property back to the foreclosed homeowner.   There are too many famous cases where the courts granted the lenders final judgments but whereby clerical error the lender never had a mortgage on the property.  The reason it slipped through the court system is the property owner never staged a foreclosure defense.

change your life mentoring click button j 300x236 1So if you are presented with a hold harmless agreement that has to be signed at closing, read it thoroughly but more importantly ask for the specific reason you are signing it.  What is there in the chain of title that you will have to assume and fix before you can sell the property?  A hold harmless agreement is not necessarily a deal killer.  If for any reason you are uncomfortable, have an attorney “shadow” your closing to give you peace of mind and so you don’t unnecessarily lose a great deal.

If something happens after you close, you can always sue and claim a “material misstatement of facts” that intentionally withheld information necessary for a reasonable person to make an informed decision.  Get legal advice as quickly as possible and don’t assume that you can’t win.

To your limitless success,

Dave Dinkel

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.

Typically a hold harmless agreement is between a buyer and seller and the intent is to pass on any liability associated with the property to the buyer.   It is important to read the agreement before signing it as you need to understand what you could be getting yourself into after you own the property.

These agreements are usually between a seller and his buyer but they can be between a seller, buyer and the closing agent.  In this case the closing agent, often an attorney, wants a hold harmless to cover him from any liability in the future – even if he was at fault.   This may indicate an attorney who is more interested in his covering his butt than the best interests of his clients.

Most often the hold harmless is used to actually transfer responsibility from the seller to the buyer with both parties being aware of the reason for the agreement.  The reason that is most common is a code or lien issue that will take weeks or months to resolve and the new buyer will have to pull new permits or resolve the issue after he is on title.

This is important that the new buyer actually talks to the city or county and understands what his liabilities actually are or he will bolt from the closing.  Most new investors will run from these properties and lose probably millions of dollars in profits every year with no reason it should happen.  If you are faced with a Hold Harmless signing do your research on the property and know the specific reason for the agreement.

In most closings of foreclosed properties (REOs), the closing agent not only represents the former lender but also actually did the foreclosure.  The closing agent will have you sign a hold harmless agreement nearly all the time.  The reason is that they don’t want to be liable for procedural mistakes in their foreclosure proceedings that could give the property back to the foreclosed homeowner.   There are too many famous cases where the courts granted the lenders final judgments but whereby clerical error the lender never had a mortgage on the property.  The reason it slipped through the court system is the property owner never staged a foreclosure defense.

change your life mentoring click button j 300x236 1So if you are presented with a hold harmless agreement that has to be signed at closing, read it thoroughly but more importantly ask for the specific reason you are signing it.  What is there in the chain of title that you will have to assume and fix before you can sell the property?  A hold harmless agreement is not necessarily a deal killer.  If for any reason you are uncomfortable, have an attorney “shadow” your closing to give you peace of mind and so you don’t unnecessarily lose a great deal.

If something happens after you close, you can always sue and claim a “material misstatement of facts” that intentionally withheld information necessary for a reasonable person to make an informed decision.  Get legal advice as quickly as possible and don’t assume that you can’t win.

To your limitless success,

Dave Dinkel

Frequently Asked Questions

1. What Should I Do If a Seller Ghosts Me?

If you feel you have been ghosted, act decisively and quickly. If you have tried texting and calling, it’s time to drive by the seller’s location. I always take the recorded Notice of Interest or Memorandum of Contract to leave, so the seller knows it exists. Go by at a time when you know they will be there and don’t be confrontational, just get the facts.

In our experience with new investors, the chances of losing a deal with no contract is likely over 85%. Verbal commitments do not apply in contract law; get everything in writing, especially contract changes.

Different ‘gurus’ have different opinions, but our experience is finding motivated sellers and then a buyer for your deal. Ideally, you should be finding motivated buyers from day one, so you are ready when you find a seller. Buyers are easier to find as you can see at https://davedinkel.com/products/

Prevention only comes about by thinking a Black Hat wholesaler will be coming after your deal. First, educate the seller that an unscrupulous investor may come by and illegally offer more money, have the seller sign your “Notice to Homeowner,” stating that he understands he cannot accept another offer.

There is nothing illegal about changing their mind, it is called seller remorse and occurs about 25% of the time. However, if they have signed your contract, it can’t be cancelled for any reason unless acceptable to the investor/buyer.

If price is an objection, you need to find out how important it is to sell fast and for cash. If the seller isn’t under a time constraint, has a money issue, or has a personal dilemma, he may not agree to the price you need. Offer to help move and build it into your price before you make your offer. However, never give the seller money; only pay the moving company, and only after closing (escrow with a closing agent). If fear is the seller’s issue, break it down into what the real problem is and answer their objections one at a time.

You can get to the root of motivation for a seller by asking a few questions. First, “Why are you selling?”, “How soon can you close?”, and Are you ready to sign an AGREEMENT today, if not, what do I have to do to make you comfortable?’. The answers to these questions will determine the truth about your seller’s motivations.

The best times to involve your attorney in your deals are to have him review your contracting, review the signed contracts from the seller and end buyer, have him open escrow and start the title work, negotiate with city or counties for lien reductions or mortgage payoffs with lenders, and to close the transactions.” Your attorney is not the adversary; it’s the opposing party’s attorney who is a deal killer, and having your attorney allows him to help overcome this obstacle.

The key to successful prospecting and bringing back deals that didn’t close is to follow up until the property is transferred in the public record. Some of our deals have been where the seller came back to us months and years later because they felt comfortable with us and not the other “pushy” investors who contacted them.

Your contract’s most important clauses are inspection period (as long as possible), when the EMD must be deposited if at all, your ability to access the property, any added clauses specific to the property that will protect you against seller claims later that were verbal only.

Visit davedinkel.com for full privacy policy, terms of use, etc.  Be sure to contact us through the website at davedinkel.com if you have questions or concerns ([email protected]).  Results mentioned in this presentation and any video, article, and/or material related to Dave Dinkel and his associated businesses are not typical nor are a guarantee of any earning potential.  No advice is to be construed as legal, accounting, or professional advice EVER.  Please consult related licensed and qualified professionals before taking any action.  No person(s) mentioned in the articles and /or shown on videos received compensation in any form for their opinions.