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Is it a normal practice to have your escrow up front even before the bank lender even accepts or counter your offer? I'm referring to having to put down $2000 for just the initial offer contract to have the house move to a contingent sale and taken off the MLS listing.
Is it a normal practice to have your escrow up front even before the bank lender even accepts or counter your offer? I'm referring to having to put down $2000 for just the initial offer contract to have the house move to a contingent sale and taken off the MLS listing.
It depends on the listing agent. Some short sale experts strongly recommend this approach because buyers are walking too easily.
If I have the seller, I strongly encourage him/her to require a deposit of $1000-$5000 to "bind" the buyer to the deal. If I have the buyer, I still want to have them put down a deposit to show the seller and the short sale lender that my buyer is committed but I might try to limit the amount to perhaps $500-1000.
This is earnest money - and shows how 'earnestly' you want the property - in a sense. The more money put down as earnest money, the more serious the buyer is. If a small amount is put down, it's possible a buyer will 'walk away' from the money - and the deal.
Earnest money is returned or applied at closing, depending.
You can put into your contract what condition you'd get the deposit back. Be liberal so you have your money returned for whatever reason that the deal doesn't close.
How many days after sellers accept an offer is reasonable to expect sellers to submit their SS package (with the offer) to the lenders?
Reason I ask is: If I put money in escrow, how do I know the sellers are not delaying the process for whatever reason, which causes my earnest $ to be held up in escrow for a long time, while they waste time unnecessarily.
How many days after sellers accept an offer is reasonable to expect sellers to submit their SS package (with the offer) to the lenders?
Reason I ask is: If I put money in escrow, how do I know the sellers are not delaying the process for whatever reason, which causes my earnest $ to be held up in escrow for a long time, while they waste time unnecessarily.
I would try to negotiate that no money goes to escrow until you have bank approval of the sale. If they won't take that, next best is to have a time limit, typically 60-90 days around here, and for only a portion of the total earnest money with rest on approval.
How many days after sellers accept an offer is reasonable to expect sellers to submit their SS package (with the offer) to the lenders?
Reason I ask is: If I put money in escrow, how do I know the sellers are not delaying the process for whatever reason, which causes my earnest $ to be held up in escrow for a long time, while they waste time unnecessarily.
Your agent should ask the listing agent if the short sale package has been prepared and ready to submit with your offer. The listing agent should have it ready to go.
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