Help - Security/Earnest Deposit - Posted by Tom Jackman

Posted by JohnBoy on April 28, 1999 at 14:58:49:

I wouldn’t give 10% to the broker to hold in escrow. If something goes sour on the deal he could tie up your money.

I would be firm on my offer and tell him $1,000 is all that’s going to be put up by you in escrow or there isn’t going to be any deal, period! Tell him he can take it or leave it.

If you feel the deal is that good and don’t want to risk losing it over putting up the 10% then I would only agree to put the money up in an escrow account that will be held by your attorney or the title company. No way would I let the broker hold the money in escrow. Otherwise $1,000 is the maximum I would put up.

If you do break down and risk putting up more then add your own conditions to the terms on how the money in escrow is to be handled. Post date the check until the day of closing with written instructions that the check is to be held in escrow with your attorney or the title company “Un Cashed” until the day of closing. If for “ANY REASON” closing doesn’t take place on or before such and such date, then the check being held in escrow is to be returned to the buyer uncashed. That’s pretty much like not having any money held in escrow anyway. :slight_smile:

Help - Security/Earnest Deposit - Posted by Tom Jackman

Posted by Tom Jackman on April 28, 1999 at 13:04:59:

I’m looking for some creative ideas.

I made an offer and included a $500 note. The broker wanted $1,000 cash/bank check on the acceptance of the offer. (So far no problem)

At the signing of the formal sales agreement the broker wants 10% deposit ($30,000) which I don’t have. I think I might be able to get them to agree to 5%. I’ve come up with a couple ideas but wanted to see if anyone else has run into this and what they did. (I offered $301,600 with the owner taking back a second for $75,000, remaining to be financed thru a mortgage broker. I’m estimating to clear $13,000/yr)

My ideas are:
Credit Cards - I can acess about $20,000 this way but would rather not tie up all my reserves with this one deal.

Partner - Don’t really know anyone with this sort of cash.

Govt. Bonds - Using no-coupon bonds could decrease my cash outlay if they were willing to accept at face value.

Create note & sell - I don’t have anything to collatoralize the note with so this would probably be an expensive way to go.

Borrow from credit union. I can acess about $15,000 this way but would rather not tie up all my reserves with this one deal.

Borrow from broker - probably not an option.