earnest money - Posted by travis gill

Posted by John Merchant,JD on July 08, 2002 at 20:10:23:

If Seller will sign saying he’s received consideration ($10 and other good and valid consideration), and you’ve got the offer and acceptance, then IMHO you’ve got an enforceable Purchase & Sale contract.

Howsomeever, if you’re the Seller, in most states, forget trying to enforce it…most jurisdictions, I’d guess, wouldn’t force the buyer to buy. Theory being there are jillions of possible buyers, etc,etc. So if that one went north, there’re lots of others to take his place.

But the law’s not at all the same if you’re the Buyer…all dirt and RE being absolutely unique, and nothing else in the world exactly the same, that Seller would, in all likelihood, be required to Sell to you…if you can get the Seller to state in the Contract document that he has received and accepts the consideration, and it’s described, then I’d advise you that yes,you probably could make the sorry, backsliding, rascal Seller sell to you even if he/she/it changes its itty-bitty, schemin’ mind.

earnest money - Posted by travis gill

Posted by travis gill on July 05, 2002 at 01:37:54:

i am ready to get in the rei business, well as ready as i’ll ever be, my plan is to start off with flipping properties for the first year giving me the opportunity to gain experience as i go. my question is two part concerning earnest money as my funds are limited for earnest money i was wondering if it’s feasible to use 500.00 instead of the 1000.00 that i see posted as a example, second i have bronchicks (i hope i spelled it write if not apologies given) book on flipping properties, he has contracts in the back of his book, can i just type those contracts over and use them???
thanks in advance

Re: earnest money - Posted by JoeKaiser

Posted by JoeKaiser on July 05, 2002 at 02:03:40:

Here’s the deal with “earnest money.”

Earnest money only happens when you’re dealing with listed properties and real estate agents. If you’re not working the MLS with an agent, you can pretty much forget about the need for earnest money.

When you’re dealing with private parties who have homes for sale, you can toss out the standard form MLS contact as well. You use your own . . . and it doesn’t mention earnest money or if it does, keep it at $100. That’s a “token” number that is considered “real” money.

Earnest money is absolutely not a requirement for a valid contract. It is merely a deposit to secure performance.

So, the short answer is . . . if you’re using your own contract and it doesn’t mention earnest money, the subject will likely never come up. Me, I use $100.


Re: earnest money - Posted by Steve

Posted by Steve on July 08, 2002 at 19:19:24:

Joe, if i remember what you need for a valid contract: 1. offer 2. acceptance 3. consideration. If i were to do an offer without an earnest money deposit (consideration) would there have to be something like “for the sum of $10 and other good and valuable consideration” in the contract? (although the 10 bucks never actually changed hands) Or could it just say something to the effect of receiving consideration, nothing specific, and no mention of cash??? Thanks!