Is it normal for seller to asked for 5% escrow down, and 10 days to get financing on the subject property? We have an agreed price for an 18 duplexes at $900k, we put in the agreement escrow of $20,000. My question is why the seller is asking for such a high escrow down? the contract is contingent on financing and inspection so we would get that money back anyway...can you guys help understand the reason behind the seller request?
We bought a 32 unit deal in February(started in October)
We worked out a deal 70%bank, 20% seller, and 10% me.
We were to buy in current condition, just a walk thru on some of the units. They were all rented.
We paid $0.00 escrow.
It will take you "months" to close. If using a bank. unless you can get a signature loan.
Do they really own the property?
If I had to guess, I would say that they were victimized by a wannabe wholesaler in the past, who was not able to actually perform, and they therefore are using the EMD as a test of your ability to actually come up with some money. This is particularly true if there is anything unusual about your financing plan, or the proof of funds/financing you provided.
The seller is the owner of the property. We also provided proof of funds bank statements showing that we have more than 25% down with the offer.
5% is Not unreasonable. And the 10 days (ours say 3-5) is to Apply (as you said) for financing, not get it approved.
Maybe the seller is looking to only use their time on people that show a commitment to buy their property . I mean after all who that is not serious would be willing to park $45,000.00 in an escrow account on a property they do not fully intend to buy? I would be very careful about the 10 days. Do they mean 10 days to apply or 10 days to actually be able to close?
They may be looking for inexperienced buyers they can take to the cleaners. Just a thought !
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