Architect · Raleigh, NC and Mid Michigan · Member since 2014 · 106 posts · 16 votes
Got this response from a seller. Does this sound reasonable?
“…seller accepted most of the initial terms of the offer, but requested the earnest money be $3500 in due diligence (non refundable) and $1500 in earnest money.”
what would your response be? totally rehabbed place with a one year warranty.
Really need to hear a few more details about the terms of the offer.
Hey Joe,
And thanks Elliot and Sierra...
$300K sale price. Started out with just a basic $5K earnest money held in escrow. 30 Day due diligence.
No Due Diligence fee...
Fairly competitive market (aren't they all)...
House had a beautiful renovation including electrical and plumbing, contractor offering 1 year warranty. Likely counter of flipping the $1500/$3500
So if I’m reading this right the sellers don’t want to be on the hook only and give you a free 30 day due diligence. 30 days due diligence is not smiled on by many sellers. Could you lower your due diligence and ask if they would lower their option fee as well?
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
4y
Do you mean $3,500 in option and $1,500 in earnest? I'm seeing this more and more these days, it seems to be a go to to weed out investors. I would counter with a higher earnest and lower option period/lower option money. I personally never pay more than $100 in option.
Lender · Houston, TX · Member since 2022 · 14 posts · 12 votes
4y
Wait is this a $3500 nonrefundable fee on top of your $1500 earnest money? I haven't seen this before. If anything I know the earnest money is not refundable in most cases so that's a lot of money upfront if the purchase is anything under $400K.
Really need to hear a few more details about the terms of the offer.
Hey Joe,
And thanks Elliot and Sierra...
$300K sale price. Started out with just a basic $5K earnest money held in escrow. 30 Day due diligence.
No Due Diligence fee...
Fairly competitive market (aren't they all)...
House had a beautiful renovation including electrical and plumbing, contractor offering 1 year warranty. Likely counter of flipping the $1500/$3500
So if I’m reading this right the sellers don’t want to be on the hook only and give you a free 30 day due diligence. 30 days due diligence is not smiled on by many sellers. Could you lower your due diligence and ask if they would lower their option fee as well?
Real Estate Agent & Investor · Raleigh Durham Chapel Hill, NC · Member since 2020 · 44 posts · 30 votes
4y
This arrangement of having a non-refundable due diligence fee is the norm here is North Carolina. It really puts the buyer at a disadvantage. I would push back and reduce the non-refundable amount as much as possible.