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Old 04-13-2007, 02:40 PM
 
Location: Sand Springs, OK
634 posts, read 1,690,160 times
Reputation: 213
OK, for the really uneducated in home buying ( like myself), what is an earnest money deposit and why would you need one?

Also what is this Alternative 1 you speak of as well?

Thanks for your insight. This forum is helpful on so many different levels.
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Old 04-13-2007, 02:49 PM
 
Location: Up above the world so high!
44,384 posts, read 54,955,144 times
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Quote:
Originally Posted by seahawksweetie View Post
OK, for the really uneducated in home buying ( like myself), what is an earnest money deposit and why would you need one?

Also what is this Alternative 1 you speak of as well?

Thanks for your insight. This forum is helpful on so many different levels.
Earnest money is a small "down payment" you offer the owner of the home you wish to buy as a way of showing him your sincere intent to purchase his home. This money is held in escrow and if the sale goes thru it is applied to the purchase price. If a buyer walks away from buying after a deal has been struck the seller gets to keep this money (in certain situations). So sometimes giving a bit more in earnest money helps the seller see how serious someone is about purchasing their home. In my experience people typically like to see from $1000. to 3000. put down.
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Old 04-13-2007, 02:52 PM
 
Location: South Charlotte
1,395 posts, read 3,790,363 times
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Earnest Money or "Good Faith" Money is a deposit that you put up upon an offer and contract on a piece of property. Basically it says yes I'm serious, motivated, and have a vested interest in buying your property.

You receive a credit for this money at the closing table.
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Old 04-13-2007, 02:53 PM
 
152 posts, read 601,573 times
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Option 1 gives the buyer the option to have an inspection to ensure that (1)electrical system, plumbing, roof, floors, etc., etc. are adequate and not in need or "immediate repair" (2) no excessive moisture and/or drainage problems adversely affecting property (3) no asbestos or environmental contamination. It also gives a "cost of repair" contingency --- you name a figure "x", and if repairs cost more than "x", you have option to terminate the contract.

An earnest money deposit is your deposit on the house -- the more it is, the more serious your offer will be taken. It's security to sellers that you are going to follow through. You are entitled to get it back if certain contingencies in the contract are not met (like you put in a $5000 repair contingency and repairs are $10,000). If you just back out and refuse to buy, the sellers get to keep the deposit (unless, of course, there was a contingency and/or condition that wasn't met under the contract).
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Old 04-13-2007, 03:38 PM
 
Location: Raleigh, NC
10,357 posts, read 17,466,589 times
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Did you have a buyer's agent? Why wasn't your agent able to help you in this situation? Did you really attempt to buy the house without first seeing it AT ALL?

The NC Real Estate Commission is there to protect the consumers. If they were not willing to pursue this for you, I would wonder why.

If you felt like the listing agent was at fault and you can prove this, I say go for it. Obviously this happened quite a while ago and it is still upsetting to you. I would not lose your earnest money deposit without a fight!

Vicki...yep...a Realtor and proud of it!
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Old 04-13-2007, 03:44 PM
 
Location: Cary NC
548 posts, read 1,552,701 times
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Quote:
Originally Posted by Charlottean View Post
Great response..

The only agent you speak of is the listing agent and you go on about not needing an agent so one would believe that you were doing this on your own.

From my understanding you put an offer in on this thing sight unseen.

In addition, 20 + years of experience in the industry doesn't mean squat. What if they only sold 10 houses a year compared to another agent that has been in for 5 and sells 50 a year. I would rather have the transaction experience for situations like this. Of course you could not do anything about that side of things.

$7500 is a lot of earnest money my friend. Out of curiosity did you use Alternative 1 on the NC Offer to Purchase and Contract?
Yes I did. Earnest money was 5K and I am into it another 2,500 legal fees
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Old 04-13-2007, 03:50 PM
 
Location: Cary NC
548 posts, read 1,552,701 times
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Quote:
Originally Posted by bluedevilz View Post
If understand your post correctly you attempted to buy a house sight unseen??

Why on earth would anyone even think of doing such a thing??

If you were unable to travel to the area to look at the house in person why would you not rent???

I purchase several homes a year in different areas. I cannot be everywhere at once. This is the wave of the future. There have been articles about this very thing in the Wall street journal. I don't have to be there. The real estate property disclosure statement is required in all of the states I purchase in and should refelct the condiditon of the property. We all know that it won't always reflect the true condition so we employ home inspectors and a final walkthrough prior to the close of escrow. Inthis case had the sellers released my deposit everything would be cool. Instead I believe (by the behavior and attitude of the listing agent) that he told them to get nasty about it because he's pissed he didn't get it sold. Property is STILL on the market with no offers and this agent STILL is not disclosing toxic mold. My biggest beef is the NC real estate commission who is responsible for discipline. They have done nothing. I can tell you this, California would have had this agents head on a plate!
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Old 04-13-2007, 03:55 PM
 
284 posts, read 1,187,330 times
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Thank you Charlottean for your quick response and helpful explanation! How wonderful to have a place where we can all benefit from others' expertise!
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Old 04-13-2007, 03:58 PM
 
Location: South Charlotte
1,395 posts, read 3,790,363 times
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No problem at all.
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Old 04-13-2007, 04:07 PM
 
152 posts, read 601,573 times
Reputation: 94
Ideuterdu --- I posted this earlier and an interested in your answer:

--------------------------------------------------------------------------------

I don't understand that if the max of repairs in the contract was $5,000, and the costs for repairs is above that, what basis do they have for not returning your deposit? We have had this happen before and we got out of the contract b/c the repairs were more than we had allowed in our offer to purchase. We had no problems with either agent (ours or theirs). Or course, we got several contractors to give us estimates on repairs for proof. Have you gotten written confirmation of the costs of repair? You REALLY need that.
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