Found Deal - Need Advise - Posted by Claude (Sacramento)

Posted by Chris on January 27, 2000 at 13:40:20:

Hi Claude-

Read this article, you’ll find it helpful:

Remind the realtor of their obligation to present all written offers. If you get further trouble with this realtor consider reporting him to the state licensing folks. You may even want to insert a clause stating that “buyer reserves right to accompany broker to present offer.”

The $100 figure is something you need to verify yourself by double checking income/expenses including vacancy rates,property taxes,etc. You may be surprised how the seller’s $100 positive cash flow looks differently when you start running your own figures.

-Good Luck,Chris

Found Deal - Need Advise - Posted by Claude (Sacramento)

Posted by Claude (Sacramento) on January 27, 2000 at 13:18:55:

I met with a realtor this morning to make an offer on a decent property.

I offered 32k which is a little higher than 75% FMV. The property is already rented ($100 positive cash flow) and in fairly good shape. That is why I was willing to make such a generous offer. However, I was a little stumped when the realtor told me I had to put up a $500 earnest money deposit for them to show the offer to the seller. When I asked why they told me it’s customary and shows that I am serious. Can they refuse to show my offer without the $500? Also, is the $100 cash flow enough to make such a deal or am I being somewhat nieve?

Thanks in advance for your feedback.


Re: Found Deal - Need Advise - Posted by TomC (Md)

Posted by TomC (Md) on January 27, 2000 at 16:32:20:

In that case, I would shut up and write them a rubber check for $500 or more. And include in the contract that your check is not to be deposited until you remove the home inspection contingency. That’s how I do it in MD.

When you get the request for a check, DONT FLINCH! Make the realtor think you have cash avail. Gives them the warm fuzzy when they present the offer. You always want to have the air of a person who can make this deal work normally. Don’t mention the “creative” stuff until you have them hooked!

Re: Try this - Posted by DougB, KY

Posted by DougB, KY on January 27, 2000 at 16:04:45:

I agree with Steve and Chris. However, I’ve had better luck post dating or giving an IOU with contingencies in the contract as to when the funds would be available. The agent I use now just brings the check to closing or gives it back to me if the deal doesn’t work. (I don’t post date the checks anymore) He knows that I’m always looking at other property, I don’t tie my funds up in earnest money until I have to, which is usually after I remove all the contingencies. Works for me. Once it took me 90 days to get a formal assumption wrapped up.

Customary doesn’t mean required - Posted by steve

Posted by steve on January 27, 2000 at 15:09:24:

While they may want you to believe it, you don’t have to have any earnest money deposit. The realtor has a fiduciary responsibility to present your offer promptly. A refusal to do so should be reported to the Board of Realtors and the appropriate state regulatory agency.

The next time you talk to the agent, add a clause that requires that you be present when the offer is presented, too. That should show that you’re serious.