Comment

Comment by Deb Orth on October 12, 2011 at 10:06am

I agree with those who are requiring earnest money deposits.  Like Jason said, it is our responsibility to protect our seller's interests.  Our board requires EMD so that is a non-issue.  If the buyer walks without the protection of any short sale contingencies, we make sure the seller gets the EMD.  After all, he/she took their home off the market in good faith because of the supposed good faith of the buyer.  If the buyer walks with no penalty, our client who may have lost other potential buyers in the meantime, at least gets something for the trouble.

Comment by Norene Williams on October 12, 2011 at 10:05am

It is also the responsibility of the agents to protect the buyers.  I would never write a contract if I didn't think the buyer was totally committed, but we all know the buyer and the buyers agent is at the mercy of the listing agent, who may or many not know how to work a shortsale.  In FL we also have addendums that specify how long a buyer will wait and I belive the original post about this issue stated it had been 6 months and still no answer in writing.  Our addendums are ususlly 45 days after date of closing on contract. 

I think the key to this is communication between the agents.  If you are calling the buyers with the good news that the short sale had been approve and then finding out that they had already purchased another home then there must not have been very much communication during the negotiation period.  If there is constant communication you would know if they were still "in the game"

 

Comment by Jim Hale on October 12, 2011 at 9:47am

Earnest money should clearly be non-refundable for at least 60 - 90 days.  The buyer must have some degree of commitment.  Our e.m. deposits are usually well below the 3% mentioned below.  No buyer should object....no buyer's agent should object.

Comment by Jason Jerzewski on October 12, 2011 at 9:38am

The buyer still has the contingencies negotiated in the purchase contract.  As listing agent, my responsibility is to protect the seller's interests.  The buyer is able to cancel the contract and get their deposit back as long as they have their contingencies in place.  I know contracts are different in every state, but I CA we have a Short Sale Addendum that specifies the length of time the buyer is willing to wait for the lender's approval. 

We just got tired of calling buyers with the good news of an approval only to find out that they purchased another property without telling us because they had no money in escrow and therefore no "skin in the game".

Comment by jennifer mullen on October 12, 2011 at 9:36am

Ourboard requires a deposit just like any other contract.  Why should the seller and agent do all the work involved only to have the buyer walk?  We write our contracts for 60-90 days.  If it expires, escrow goes back to the buyer, but if the buyer walks with an accepted contract (in writing) in place, I've had a couple of sellers receive the money.  It doesn't have anything to do with the bank if the short sale doesn't go through.

Comment by Phil Putnam on October 12, 2011 at 9:35am

The seller can get the earnest money from a short sale, if the approval has not been given by the bank yet, because you don't have a short sale until the bank agrees. Furthermore, it is standard prctice in most of our transaction in Arizona to have earnest money put into escrow upon Seller acceptance, however the amounts range any where from $500 to $1500 so it isn't that much.

 

 

 

Comment by Norene Williams on October 12, 2011 at 9:28am

If I were representing the buyer, I would advise them NOT to place any money in escrow until the bank has approved the short sale.  Why would someone want to lose the interest as well as the control of 3% while the banks drag their feet on an approval?  We put closing dates in the contracts and they totally ignore those so why would putting money in escrow secure anything?  There are still too many shortsales that do not happen.  If I represent the buyer and the short sale is taking too long, we go to look at other properties.  Sometimes it reinforces their determination to wait out the short sale and sometimes it indicates that they should move on.

Other question I have about deposits if the buyers do walk is who gets the deposit?  Seller is not allowed to receive any funds from the sale so how can they receive a forfeited deposit?

Comment by Kevin - Greenville, SC on October 12, 2011 at 9:08am

http://centralfloridashortsales.com/post/1711560/a-short-sale-purch...

Comment by Jason Jerzewski on October 12, 2011 at 8:56am

About a year ago we implemented the policy that the buyer MUST deposit 3% into escrow within 3 days of seller acceptance (Not Lender).  Depending on the deal, we may allow a reduced amount, but we will never submit a file without money in escrow. 

After implementing this, we know the moment a buyer wants to make an offer on another property because they are calling us to get their deposit back.

Comment by Michael Hayley on October 12, 2011 at 6:16am

My suggestion would be to work the transaction as normal. Find a buyer for a fair price and offer a short sale. Later in the process of negotiations Seller might accept a note, but I believe never propose a note from the beginning.  That is like putting chum in the water with sharks. Use the note as your worst case position if you fail to get a deficiency release otherwise. 

• ‹ Previous
• 1
• …
• 109
• 110
• 111
• 112
• 113
• …
• 220
• Next ›
• Page