Making offers. - Posted by Eric Graham

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 :slight_smile: 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 :slight_smile: - 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.

Making offers. - Posted by Eric Graham

Posted by Eric Graham on February 16, 2001 at 08:52:10:

When making lots of offers do you guys put up ernest money or deposits when you make the offer? (I do not want to do this because it will cut down on the number of offers I can make.)

How do you get around doing this? I have been able to get past this with FSBO’s (I tell them I will put ernest money in an escrow account upon acceptance of the offer.)
However when the owner has the property listed with an agent, the agent doesnt seem to like this.

Any thoughts would be great.



The simple answer - Posted by Rob FL

Posted by Rob FL on February 16, 2001 at 18:39:09:

Simply put a clause in your contracts that the earnest money deposit is not due until the offer is accepted by the Seller. In addition, I put in the contract that the deposit will be held by the closing title agent. Since this is an unknown company at the time the offer is made there is no way a deposit can be put into escrow until the title agent is designated. Don’t make this too difficut.

AVOID THE PROBLEM! - Posted by Jim

Posted by Jim on February 16, 2001 at 18:24:14:

Your problem is Listing Agents & Realtors!

You have identified your problem and the answer is simple… Avoid them and deal with motivated sellers that call on your ads!


Re: Making offers. - Posted by PBoone

Posted by PBoone on February 16, 2001 at 09:12:15:

We put up a promissory note in the amount of $x due after all contingencies are satisfied.

Re: Making offers. - Posted by Nate

Posted by Nate on February 16, 2001 at 09:10:22:

What I am doing now, and has worked for me, is as follows:

  1. I put $500 in escrow with my closing attorney.

  2. Every offer I make, I indicate that there is a $500 escrow deposit with the closing agent. Since, in my area, the buyer designates the closing agent, this is normal.

I don’t know why the agent would object to your having the money in an escrow account. I think the key is to tell them it IS in the escrow account, not that it WILL BE. A “will be” is a promise, not earnest money.

  1. When/if a contract is accepted, the attorney and I settle up.

He always has a deposit ready to go and will verify it for anyone that wants to know.

To give credit where credit is due, I believe Steve Cook was the first one to post this idea on the board.

Good luck,