Good evening everyone,
I just want to clarify, when you are negotiating the price on the property, the earnest money can be refunded if I don't decided to go through with the deal? When can't it be refunded after that first week?
You have to read the contract before you sign it. I know the contracts are long but trust me don't ever just take the word of your agent. You're a businessman, don't think of yourself as a customer. In general the contract should say that you can back out the deal if, fails inspection, you couldn't get the finance, you discovered its in a flood plain, and a couple other exceptions.
@Andrew Pettit Usually you need to have some kind of reason to back out of the contract
@Andrew Pettit , it depends on the length of the Escrow and contingency period you agree to with the seller.In the state of California during a 30 day Escrow for example,you have 17 days for an inspection period to walk away from the deal without a financial penalty .However,to be competitive in obtaining investment properties against seasoned investors with cash,you would have to offer a very short contingency period like 3 to 5 days to convince the sellers to sell it to you.Many professional investors with access to all cash are actually willing to buy the property with zero contingencies and accept the risk of a bad physical inspection just to win the deal.
Brandon, David and Laith for your clarification.
Typcially, you can get out of a contract within your inspection period, whatever length that is per your specific contract UNLESS your EMD was labeled as non-refunable, in which case, it will not come back to you if you withdraw.
The only other time it would come back to you is if you were unable to qualify for the loan, or the property didn't appraise at the contract purchase price. Most contracts provide for EMD to be refunded to the Buyer in the event that a loan is not able to fund due to Buyer qualifications.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.