earnest money and home inspection question (contingent, clause, fees, condo)
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Thanks for input everyone. So in other words, most realtors take their homes off after contract is signed and during the 5 day period where they can submit the earnest money and change their mind? Could a house be left on for showing during this time or is that not done?
In my area, the standard contract allows the buyer to get out of the deal and get their earnest money back based on the findings of the home inspection, so it wouldn't matter if it was done before or after the money was received/deposited.
Thanks for input everyone. So in other words, most realtors take their homes off after contract is signed and during the 5 day period where they can submit the earnest money and change their mind? Could a house be left on for showing during this time or is that not done?
It depends on your local MLS.
Ours has these statuses:
Active Not under contract, showing and accepting offers
AWC (Active with Contingency) This means the home is under contract with contingencies, which may be inspections, financing, etc. Seller is willing to continue showing and will accept a backup contract. This would be one that you could use if it's available at your MLS.
Pending Under contract and not continuing to market, or show.
Thanks for input everyone. So in other words, most realtors take their homes off after contract is signed and during the 5 day period where they can submit the earnest money and change their mind? Could a house be left on for showing during this time or is that not done?
My MLS requires with either move it to Pending or Active Contingent on Inspections status. Either way, they home unlikely to be shown during that time frame. Who wants to waste time looking at homes they can't buy?
I find it counterproductive to take the house off the market for 7 days while the potential buyer weighs the pros and cons. We priced it low for a quick sale, had many showings and I find it not in our interest for our realtor who is supposed to be working for us, to let an inspection go ahead without the earnest money in hand. I've bought 2 places and I always had to turn in the earnest money before inspection.
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Originally Posted by Lacerta
In my area, the standard contract allows the buyer to get out of the deal and get their earnest money back based on the findings of the home inspection, so it wouldn't matter if it was done before or after the money was received/deposited.
In my area, the standard inspection contingency also dictates that a buyer receives their deposit back if the contract is terminated due to the results of the inspection. However, technically it's not an executed contract until I have the deposit check in hand. So, no contract means no inspection. I absolutely get the check first, but in practice it really doesn't make a difference.
If anything, this buyer did you a favor by doing the inspection quickly. This just means if they're backing out you'll get the property back on the market that much sooner.
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Originally Posted by Silverfall
Same here. The buyer could terminate and get their earnest money back so it is a mute point.
Sorry to be the grammar police here, but there's no such thing as a mute point. It's a moot point. It's a common mistake, but your posts are always so intelligent that I hated to see this mistake in there.
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Originally Posted by Captain Bill
It depends on your local MLS.
Ours has these statuses:
Active Not under contract, showing and accepting offers
AWC (Active with Contingency) This means the home is under contract with contingencies, which may be inspections, financing, etc. Seller is willing to continue showing and will accept a backup contract. This would be one that you could use if it's available at your MLS.
Pending Under contract and not continuing to market, or show.
Sold Escrow is closed.
Quote:
Originally Posted by Brandon Hoffman
My MLS requires with either move it to Pending or Active Contingent on Inspections status. Either way, they home unlikely to be shown during that time frame. Who wants to waste time looking at homes they can't buy?
We have similar status levels in our MLS. Once you change the status to one that indicates a contract is in place showings and calls drop off to nothing. Except for calls from people who see the listing on Zillow, Trulia, etc because those sites are so bad about updating their data.
Kind of interesting. In Nevada and, I think, most of the west, you can quit during the due diligence period because you have decided the phase of the moon is wrong. The buyer has to put up the earnest money but they then get some number of days to change their mind. Generally someplace between 7 and 14 - generally ends at 10. Had a nice little condo to pop out on three in a row in three days. Mostly I think investors really not bothering to look at the property until at contract then swiftly deciding the HOA is too high.
You can write a contract here not to do that. But I don't know anyone who has.
Sorry to be the grammar police here, but there's no such thing as a mute point. It's a moot point. It's a common mistake, but your posts are always so intelligent that I hated to see this mistake in there.
THANK YOU! That's one of those grammar errors that's like fingernails on a blackboard to me.
Thanks for input everyone. So in other words, most realtors take their homes off after contract is signed and during the 5 day period where they can submit the earnest money and change their mind? Could a house be left on for showing during this time or is that not done?
I think most agents minimize the importance of securing earnest monies. I think the money should be delivered in "immediate funds" such as a wire, otherwise, why even have it. Agree, it makes it too easy for buyers to get cold feet. I know someone who lost thousands on a deposit check that was cancelled after the buyer's foot temp dropped.
While some inspection contingencies may allow for refund of the EM, some of the purchase contracts that I have seen actually make it difficult for a buyer to get their EM back (defect has to be something that is major that immediately effects a house).
Check out the Earnest Money thread ( about a week ago) for a more in depth debate on this topic. Bottom line... most of the agents don't think liquid EM is important. I bet you sellers who get burned have a different opinion!
I think most agents minimize the importance of securing earnest monies. I think the money should be delivered in "immediate funds" such as a wire, otherwise, why even have it. Agree, it makes it too easy for buyers to get cold feet. I know someone who lost thousands on a deposit check that was cancelled after the buyer's foot temp dropped.
While some inspection contingencies may allow for refund of the EM, some of the purchase contracts that I have seen actually make it difficult for a buyer to get their EM back (defect has to be something that is major that immediately effects a house).
Check out the Earnest Money thread ( about a week ago) for a more in depth debate on this topic. Bottom line... most of the agents don't think liquid EM is important. I bet you sellers who get burned have a different opinion!
Actually it is very rare anywhere to actually have earnest money change hands without a sale being completed.
It is a demonstration that the buyer is sincere and able. It is in no way a surety bond that the deal will be completed.
Some of you simply don't understand how this works.
Actually it is very rare anywhere to actually have earnest money change hands without a sale being completed.
Are you saying that the buyer keeps (EM doesn't change hands) the EM until closing?
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It is a demonstration that the buyer is sincere and able...
Disagree. A buyer can be able but not sincere and vice versa, EM does not always relate to either.
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Some of you simply don't understand how this works.
Based on some agent comments on this thread, I agree.
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