Owner Fi, Seller pushing for large earnest money down, seems odd

3 Replies


Have a deal in place, price is agreed, owner will carry, everything is good as far as terms.

They want me to sign the contract and include the 10 percent down with it on the same day. They live out of state and are wholesalers. I told them I want to give them about 500 earnest money with the contract signed today and the rest will go to escrow with my title company to be paid to them at closing.

They said this probably wont work for them, but didn't elaborate on why except to say that they want 10% EMD. (I.e. the same amount as the down money) He also mentioned that I am getting a deal below ARV as if that implies I should pay more earnest? If I hand these guys a check for 13k today with the signed contract, I don't think that is safe but am I over thinking it?

They want me to sign contract, they sign it, then I pay down money all in the same day. They live far away. The title insurance does show that they are the owners and was purchased 3 weeks ago.

Sounds fishy to me.....Anytime someone asks for more than is necessary I see a red flag. They won't elaborate...why?....Looks like they are not being up front in their business dealings.

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When they bought, did they buy out right, or did they do some type of seller financing/sub2, etc.?  You don't want to get hung in some due on sale situation.  Yes, 10% EM is excessive in this case, and whatever EM goes to a title co.