OfflineWhen performing an act of submission for the 25-1 system, is it best to have the terms of the offer written so as to have as little earnest money on the table as possible? I'm being told by my Agent that making a point of having a declared earnest money offering of 10$ will cause most, if not all of my offers, to be dismissed. I'm wondering if diminished earnest money offers are included as part of the cause of 24 offers being denied? I can't afford to lose the 1000$, or whatever it might be, at this stage if the inspection period is prolonged and the deal does not go through with any of my buyers.
Essentially I'm wondering: Do I need to have high earnest money offerings when going through a Real Estate Agent in order to get deals accepted? And also if there is anyway around being on the hook for that fee if the deal is prolonged beyond the period of an inspection refund.
That's a great question. Understand that the main purpose of earnest money is to show intent. So do you have to have a large amount of earnest money to get a deal accepted? No, but keep in mind that most realtors and sellers are used to seeing high earnest money deposits, so when a $10 earnest money comes through they tend to be skeptical. You should look at increasing your earnest money. Don’t go crazy, but make it higher. You want the seller to know that you are a serious buyer.
In addition to that I advise my students to make the earnest money check out to “Escrow”, make a copy of that check, then submit the copy of the check with your offer, instead of the actual check.
As far as losing your earnest money, that is what your due diligence period is for. Get all your ducks in a row during that period. If you aren’t able to get your ducks in a row in the alotted time, cancel the contract so you aren’t losing any money.
If I find a great deal that will bring the buyers in,and I get the house locked in on contract,with the inspection clause,and the earnest money in place,and the grace period for 30 days,for some reason I cant find any buyers in 27 days,can I back out and get my earnest money back?
mike
Yes, put in contract 14 days inspection, then get on it , trying to find a buyer, usually around day 12 I am ready to throw in the towel. That time is (your out period )
Hope it helped
Curtis Fillers
(Charlotte,NC)
Curtis - that tactic entirely solves my query. Thanks!
clarsen - Thanks so much for your great response to my thread. I think I'll use your exact means for submitting my offers...along with an extended inspection period.
Thanks so much for the great info that is a big help.One more thing who pays for the inspection?
mike
Kevin, they are talking about a 10 to 14 day inspection period. This gives you time to do your due diligence. During that period find a buyer. If you cant find a buyer in that time frame you can simply back out of the contract. A good out is " subject to approval by my partner ". Use this and just say that you and your partner could not concur on the property thus you must void the deal.
Success in REI
Garold
Good link for this topic
http://www.deangraziosi.com/real-estate-forums/contracts/13540/escape-cl...
In reference to your question about who pays for the inspection? There isnt any money exchanged for this type of inspection. After your offer is accepted you have 14 days to get your end buyer to sign your contract , but like I said usually around day 12 I pretty much know its over if I havent got anyone and my Original buyers passed , for what ever reason. During that 14 days is really the time for you to get the buyer.
Curtis Fillers
(Charlotte,NC)
If you find a great deal,you will find a buyer!