Posted by TD on February 16, 2001 at 12:17:47:
You’re right - as I also recall, Steve Cook brought this one to the board - and it’s a beauty.
Sort of a revolving escrow account. As long as the money is in escrow with your attorney, and can be verified as such, you can use this on as many deals as you want to at once.
Why? Because you’ll “settle up” at the closing table each and every time, ensuring that the deposit amount remains in escrow with your attorney.
Pick a nominal amount high enough to make the Seller take notice, but low enough so as not to break the bank every time you do a deal.
Since it’s on escrow with my lawyer (and thanks for the idea, Steve I use a nominal amount of $1K each time even though I have more “stashed” as it were with my attorney.
In fact, I’ve taken Steve’s idea and made it better - set up a retainer with your trusted creative RE lawyer for a modest sum, say $5K to $10K.
Why? Well, if you can’t afford to do this - then perhaps you should consider it…just keep doing your smaller deals until you have enough spare change to allow you to set aside this much cash.
Since you want your attorney at your beck and call - within reason - you need to set up some sort of retainer agreement. That simply means that your attorney and you will set out exactly what the terms of his services to you are, and what you can expect from him.
The retainer merely binds him to you for a fee, and ensures him that he’ll be paid as needed. A good creative RE won’t keep the proverbial clock ticking all the time - just when really needed.
The key here is that part of your retainer agreement is to allow you to designate a significant portion of those funds held in escrow as a retainer with your lawyer, as a deposit, when needed for your RE transactions.
If your RE lawyer can structure your deals such that a nominal sum is kept on hand in escrow, each and every time, then you’ll not have to worry about having a deposit ever again.
In this neck of the woods, when dealing with RE agents, they like to control you and your money - trying to have you give them your money for them to hold - sort of to emotionally bind you.
No way Jose here. My lawyer has the funds - and that means I’m in control. Give your cash away - and you’re no longer in control of the transaction. Simple.