Hi All - Wanted to find out how everybody feels about when to actually require the earnest money check on a short sale? I've just received an offer on one of my ss listings and, ordinarily, I collect the EM within 5 days of offer being accepted. But, I know when I've represented buyers in a short sale, I've always asked for EM to be submitted AFTER we receive bank approval. Now that I'm representing the seller, I'm not so sure I like that concept! Would love to hear what other listing agents do.
Depends upon your market. Most people in my market still try to avoid SS, so I put up as few barriers as possible.
Although I'd love to have the EMD in hand, it does nothing. Our state mandated SS Addendum allows the EMD to be refunded at any time before acceptance. It also requires us to do other things that I am not in favor of.
Nonetheless, I find that as long as I do MY job right and communicate thoroughly with all parties involved, I do not have many Buyers jumping ship. They only do so if I can't get an approval letter within 3-4 months.
Alot of my SS are approved within 30. So, exceed expectations, know what you are doing, do it better than anyone else and you should be fine.
I'm on the same page as Drew.
Well, I went ahead and asked for the EM within the required 5 days, per our standard offer to purchase. My reasoning went as follows: a) our RE Commission in NC has stated that an executed contract on a short sale is the same thing as an offer to purchase with a contingency (just like if buyer has home to sell) - the 3rd party approval is simply a contingency to the contract, therefore, it gets treated as every other offer to purchase b) buyer is holding off on inspections until 15 days after 3rd party approval and there is no due diligence money, so the buyer has zero skin in the game if we don't at least collect the EM (knowing full well that our state SS Addendum also mandates return of EM any time prior to 3rd party acceptance). I explained it that way to the buyer's agent and she is bringing me the check today.
I agree with Sharon's logic. I have requested the EM and the inspections to be done as soon as possible rather than waiting for 3rd party approval. The buyer needs to clear objections early in the transaction. Also the buyer needs to feel like they are making a solid offer on a house that will close in a timely fashion so they may as well act like they are buying the home.
If you don't get inspections, EM up front, then you have no contract, no commitment, and buyers can and will walk away at any time. Why waste your sellers time? Get a commitment or take a pass.