Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
If we are expecting a solid offer on our house, can we set the amount of earnest money we would like them to put in escrow? Would it better our chances of a successful closing? Thanks for your thoughts.
Where do you think the earnest money goes if the buyer just walks.. I ask because of the wording on my purchase contact in Ill and then when I sold the house, the wording had changed - "vague" would be an appropriate comment.. Just curious ???? I think I have posed a similar question in the past with no comments back So ???
Where do you think the earnest money goes if the buyer just walks.. I ask because of the wording on my purchase contact in Ill and then when I sold the house, the wording had changed - "vague" would be an appropriate comment.. Just curious ???? I think I have posed a similar question in the past with no comments back So ???
It depends on your specific contract as to where it should go. If your contract is "vague" then it may be up to the title co (or settlement attorney depending on location) to either make a call, or wait for some form of dispute resolution outcome. If the buyer walks outside the bounds of an acceptable contingency cancellation, it generally should go to the seller.
I remember on my first house purchase I asked my attorney what happens if for some reason I back out and would I lose my earnest money. He told me that is why I have an attorney and that there are so many ways to back out that wouldn't technically break the rules or that it would cost the seller so much in costs to get the money back that it was pretty much a non-issue.
I'm sure buyers do indeed lose their earnest money sometimes after backing out. I do wonder though how often that actually happens.
I'm confused as to why someone would think it's not ethical to submit multiple offers for a buyer. Even if they're not an investor and looking to just buy one house, you can still write multiple offers on properties, and not break any rules, laws, or ethics!
I'm confused as to why someone would think it's not ethical to submit multiple offers for a buyer. Even if they're not an investor and looking to just buy one house, you can still write multiple offers on properties, and not break any rules, laws, or ethics!
Some people equate a superior position in negotiations to bad ethics.
Unfortunately, if you're a seller right now, you have very little leverage in negotiations except that you (hopefully) have a property in demand. There's nothing wrong with a buyer shopping for the "best deal" and taking the one from the seller most ready (or desperate) to sell.
In NC where I work, an Offer becomes a Contract when accepted and acceptance by Seller is communicated to Buyer. In a blink. A phone call is adequate and he who speaks first "wins."
If buyer is able to close on multiple properties, going to contract for multiple properties is fine, I think.
So, a scenario....
Buyer agent/REALTOR® forwards multiple offers to multiple Listing Agents.
One contract without counter is coming back on the fax machine while the phone rings and another Listing agent says, "Seller has signed. You have a contract."
Two contracts for that buyer. Buyers agent knows that Buyer can only get funding for one contract.
Agent must communicate immediately to one or both parties the material fact that Buyer cannot close on both contracts. To do less would not be "Fair and Honest."
I think an agent writing offers beyond what a Buyer is capable of consummating is on thin ethical ice.
Last edited by MikeJaquish; 07-14-2011 at 02:51 PM..
You can counter-offer at the same price but with larger earnest money. You can also write a counter-offer that requires additional deposit at various stages (completion of inspection, etc.).
Stuff like that is not going to work in today's market. If you pulled a trick like that with me, I would either walk away or counter back with a deposit amount that was 50% less than the original offer and with a reduction in the purchase price. Is the chance that you will get a larger, but in practice worthless agreement to provide a larger deposit really worth losing a buyer over?
In NC where I work, an Offer becomes a Contract when accepted and acceptance by Seller is communicated to Buyer. In a blink. A phone call is adequate and he who speaks first "wins."
If buyer is able to close on multiple properties, going to contract for multiple properties is fine, I think.
So, a scenario....
Buyer agent/REALTOR® forwards multiple offers to multiple Listing Agents.
One contract without counter is coming back on the fax machine while the phone rings and another Listing agent says, "Seller has signed. You have a contract."
Two contracts for that buyer. Buyers agent knows that Buyer can only get funding for one contract.
Agent must communicate immediately to one or both parties the material fact that Buyer cannot close on both contracts. To do less would not be "Fair and Honest."
I think an agent writing offers beyond what a Buyer is capable of consummating is on thin ethical ice.
I agree and would not counsel a buyer to put in more than one offer at a time. But, I think think this scenario may become frequent in the future in NC with the Due Diligence Period in our new contract. A buyer can cancel the contract for any reason or no reason. If it does come to pass, you will be see the due diligence fee become more important than the earnest money.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
