Earnest Money....do I have to?

Question

If seller asks for earnest money to be placed into an escrow account for wholesale deal, can't I have my buyer pay that?  If so, how?  Thanks!

Account Closed · Answer

The best way is to look for a no-money down deals by finding Buyers First.  It's easier to look for properties for a Buyer than look for a Buyer for a property.

Dedicated to your financial success,
Trace Trajano

Account Closed · Answer

Thanks everyone for all of the great answers! I'm sure I would be lost if it weren't for you all.

Alan Brymer · Answer

I've done that a few times when making offers unlisted properties, and was somehow able to get away with only $100 earnest money deposit. But make sure you do no more than $500 and you're totally sure the deal is going to go through.

Jon Holdman · Answer

The contingencies usually have time limits, too.  If the time limit passes without you notifying the seller and the sellers agent you can't do the deal, the contingency will no longer be returnable based on that contingency.

Also, you want to be sure your contract says "liquidated damages". and not "specific performance".  Liquidated damages means the earnest money is the most you can lose.  Specific performance gives the seller the right to sue you for more money if you don't close the deal..

Curt Davis · Answer

Warnetta,

Usually you will loose your ernest money if you dont complete the transaction.

Stephani Davis · Answer

Warnetta,

It depends on what your contract says.

If you are making offers with no contingencies (financing, inspections, etc), then you will lose your deposit if you can't follow through with the deal.

Steph

Jeffrey K. · Answer

Yes, but it might take a few days/weeks.  You also may have to pay a fee to get it out.  Read the fine print.  I try to word my offer with EM shall be paid in full within three days of an accepted offer.  I give my agent the check and let her hold it and send a copy or a picutre if they want.

Jon Holdman · Answer

You pay it, then have your buyer pay it back to you.  If you're dealing directly with an individual, it should be small. If its a bank on a REO, its going to be large, and they're not going to accept your offer without it.

Account Closed · Answer

Thanks Jon!  It makes more sense now.......if for some reason the deal falls through, I get my money back right?