Posted by David in Ft. Worth on March 23, 1999 at 24:12:25:
Hi Jim, good luck and please let us know what happens. I love a good slasher post. Actually, I’d like to learn what you are able to do about your ROGUE agent.
David in Ft. Worth
Earnest Money - Posted by Dave(Mi)
Posted by Dave(Mi) on March 22, 1999 at 20:02:58:
The realetor says I must put up 500 for earnest money.Is this nessesary to make the contract legal?
Re: Earnest Money - Posted by L.A.
Posted by L.A. on March 23, 1999 at 14:30:51:
U don’t “HAVE TO” do anything…I suggest using a “letter of Intent” or promissory note…or a combination of the two.
When if comes time to make the deposit…NEVER deposit funds in an agents/brokers escrow account, U might not see it again…instead U pick the title company or trust department at some bank.
Just my 2 cents.
Re: Earnest Money - Posted by Sean
Posted by Sean on March 23, 1999 at 11:18:23:
It’s not necessary, but I recommend that you do put up some kind of earnest money deposit and $500.00 sounds about right.
Most Realtor contracts have a “liquidated damages” clause which protects the Buyer in case something goes wrong. For example, if you didn’t have an earnest money deposit and you died, your estate would get sued. Obviously no one plans on dying during their escrow period but lawyers get paid big bucks to protect you and your heirs in case of some pretty unlikely events! Also consider what might happen if you got divorced, kidnapped, the IRS garnished your wages or your spouse’s, or 100 other very unlikely occurances that your attorney has carefully protected you against.
Some people have suggested that if you make 20 offers rapid-fire and you’re putting $500.00 earnest money on each person that you’d need to have $10,000 in the bank, but that’s not really true. Just make your offers expire by midnight (or 12-hours) after the offer is presented and you can easily present 2 offers a day without getting burned.
Also, most agents won’t tell you this (if they even know) but if you make 10 offers, and one gets accepted, you can call up the other 9 people and tell them you’ve withdrawn your offer, even if the expiration time hasn’t come around. If they haven’t accepted your offer you can withdraw it at any time.
Re: Earnest Money - Posted by Craig_NOLA
Posted by Craig_NOLA on March 23, 1999 at 24:03:01:
Dave,
Read the excellent article on this subject at www.creonline.com/art-111.htm
Re: Earnest Money - Posted by Jim IL
Posted by Jim IL on March 22, 1999 at 23:07:34:
Last week my wife and I made 20 offers on homes that were “Ugly houses” for the purpose of “flipping” them.
In each contract, I stated that I’d make an earnest money deposit of $500 payable three days after acceptance.
The good news is that one offer was accepted right away (probably offered too much) and several are still going “back and forth” with counter offers.(should finish negotiations tommorrow on at least one more…YAY!)
But, one area realtor, who frankly I’ve heard some bad stories about, was the listing agent on one of the homes. Today, my “buyers agent” called me and informed me that this “Listing agent” had left her a voice mail message saying, “You must not want to get paid, this guy only offered $500 earnest money, and I won’t even present the offer to my seller with that little amount!” My agent tried to return his message and “Straighten him out” but he was out of the office.
Well, the bad news is that he is also the Broker for his office, and owner, so there is no “Boss” to complain to.
Tommorrow I am to meet with him, and explain (he’s been in RE for 35 years and should know this already), that the LAW says he MUST present my offer.
After we explain that, I’ll show him the “Expiration date” on my offer, and tell him we are no longer interested in this home. (NEXT!!!)
I have yet to decide IF I’ll take any further action.
I was thinking about contacting the seller directly, because the home has been listed for 6 months, and this may be why. I feel that the seller should know that the agent has refused my offer without telling them about it. I’m not sure if this will do any good, so I’ll keep thinking about it.
If I do talk to them, I’ll aknowledge the fact that MOST buyers in my area do put up, $1000 earnest money (and they are mostly owner occupied), but due to the fact that we buy MANY homes monthly (well, we intend to), tying up more with each would not allow my money to work for me.
Besides, we offered a 15 day close on this home as well.
So, in answer to your question, NO! earnest money does not make an offer legal. EVERYTHING is negotiable.
I could offer my pet dog in exchange for the home if I wanted to, and the Listing agent HAS to present it.
The good news is that this agent is a rarity amongst the truly professional RE agents in my area.
Any advice on how to handle this RENAGE agent, is greatly appreciated!
Sorry to ramble, but being an ex-cop, I have a tendency to immediately dislike people who blatantly BLOW OFF the LAW!!
just my $.02,
Jim
Re: Earnest Money - Posted by Bob-Tx
Posted by Bob-Tx on March 22, 1999 at 21:10:18:
Absotlutely not! Check the archives here for lots of posts about earnest money and you will find that often none is offered. I used to buy with $10 down if dealing with an individual and now almost never put more than $200 earnest money into a deal.
On REO’s the lender may have some requirments, or a particular seller may have some minimums, but generally you put up whatever you feel comfortable with…it is negotiable.
Re: Earnest Money - Posted by Geff
Posted by Geff on March 23, 1999 at 19:24:52:
That is so untrue!!!
Where did you get the idea that depositing earnest money with the broker would mean you will never see it again? That’s ludicrous.
If you are going to do something to cause the broker to keep your deposit, he will get it wether you deposit it with him or with a title company.
Geff
Blowing off Renegade Agents - Posted by Sean
Posted by Sean on March 23, 1999 at 11:03:33:
I suggest you do three things:
- Write a letter of complaint to the Realtor board.
- Write a letter to the owners of the house explaining that you had made an offer on the house for $XXX,XXX.XX and that their agent refused to present them with the offer and that they MIGHT have a pretty good lawsuit against that agent. Mention that you “heard” of someone who successfully sued his agent for $10,000.00 or some other made-up number. If the Seller calls up the agent and threatens to sue, it could sober him up fast!
- Write an editorial to a local paper slamming the agent. You never know, it might get printed.
Just my 0.02 cents.