Earnest Money
I've been fortunate to talk with quite a few investors from this site and I often hear that it's not unusual for them to place 4 to 5 bids on houses in a month. Here's my question; if you give 1k, or even $500 earnest money with each bid aren't you tying that money up for a month...if the offer falls through don't you have to wait 30 days to get it refunded? Is there another way of doing this that I don't know about (and I know there is a lot!).
Thanks
Most Popular Reply
Chuck,
WHen submitting multiple bids, even 100 in one month, you are not actually putting up the $1000 or whatever your offered earnest money deposit (EMD) is, you are sending an executed contract with a copy of a check for the EMD amount and the contract should stipulate that the EMD will be provided within 3 business days of accepted contract.
Therefore, you can make 1000 offers and offer $5,000 of earnest money, but until you get an accepted offer, you don't need the $5,000,000 in cash necessary to make that many offers.