Earnest Money Question - Posted by Scott(AK)


#1

Posted by JPiper on November 27, 1998 at 18:39:41:

If nothing is signed, there is no contract. Real estate contracts need to be in writing.

JPiper


#2

Earnest Money Question - Posted by Scott(AK)

Posted by Scott(AK) on November 27, 1998 at 17:52:25:

Got a call today from some folks that called 2 weeks ago and wanted retail for their home. Seems reality has set in and the dropped the asking price. By 10K.

The sellers have had an offer from some buyers and said they sent the paperwork with the buyer to have somone look at it. The seller DID NOT accept any earnest money from the buyer. Seems she has now gotten ticked because the buyer is nickle and diming her to death.

Today they called me and asked if I was still interested in their home. I said I am ALWAYS interested in homes. They got onto the subject of cash and a quick punch of the buttons in the calculator changed their minds. LOL. So we are in negotiations on a L/P. I have an appointment to see what the kitchen tables looks like tommorrow morning.

My question: Since the seller DID NOT accept any earnest money from the buyer, are they allowed to enter into a contract with me. My gut says…get eyes on the offer the buyer has and make sure. Can anybody offer some insight?


#3

Re: Earnest Money Question - Posted by JPiper

Posted by JPiper on November 27, 1998 at 18:10:35:

Scott:

A contract DOES NOT require earnest money…what it requires is consideration. Consideration is what the parties to the contract promise to give to or receive from each other in the contract.

What I would do is take a look at the contract. What I would be looking for is whether the seller has any contingencies. I would also be looking for is what, if any, contingencies the buyer may have in the contract, the performance or lack thereof may dictate the termination of the contract.

What you could do is to write up an offer that is subject to the cancellation of the first offer. This puts you in place pending the resolution of that situation. What I would not do is to interfere in some manner with the buyer’s ability to perform, nor would I suggest that the seller need not perform if all conditions of the contract were met. This may open you to a lawsuit.

JPiper


#4

Update: - Posted by Scott(AK)

Posted by Scott(AK) on November 27, 1998 at 18:36:03:

JPiper,

Thanks for your reply. Your reply got me to thinking and I called the seller back again to get further clarification. She told me they had met, discussed the purchase, and there were some terms the buyer wanted to change. So she DID NOT sign anything…she just sent the paperwork with the buyer so the lending institution could review them. After that is when she felt she was being nickled and dimed and figured she did not want to deal with that.

Again she signed nothing, seems this would leave me in the clear to negotiate.

Any thoughts on the matter?

Scott (AK)


#5

Re: Be Careful - - Posted by Doug Biss

Posted by Doug Biss on November 27, 1998 at 21:39:41:

The seller may try to create an auction between the two of you or be trying to get the other buyer more in line.

Doug