I have the contract, the financer and the buyer...now what?

10 Replies

I have a great contract locked down and I have a buyer and the hml (who also wants to buy property if buyer cannot). They are both ready to give me 20,000$ for the deal.

I have until 22nd of april to lift conditions and closing is on 29th.

What next? How do I guarantee that nothing goes wrong?

@William Johnson Get a deposit from your buyer that is equal to your earnest deposit.  If it is really a good deal, they will happily be on the hook for the earnest money.

Great job Wiilliam! Larry, can you please explain what earnest money is? I am not too familiar with this. Thanks!

@ Bryan

Earnest money is the deposit you give with your offer to purchase a property.

@Bryan Watson undefined

Assign the contract for your $20k fee, plus whatever EM you put up.  What's the question?

@Larry T. There is no earnest money deposit on this purchase contract.  I suppose I could just ask him for 10,000$ up front because the lender will be giving a mortgage of 20,000$ more than my purchase price so, he will be able to recoup the 10,000$ at the notary (equivalent to closing company here).

@Bryan Watson Thank you!

Originally posted by @Wayne Brooks :

Assign the contract for your $20k fee, plus whatever EM you put up.  What's the question?

 I am not sure, I have never gotten this far down the line on my own before and I don't know what to expect nor how to prepare for the unexpected. 

@Bryan Watson Yes.  Earnest money is the deposit that is forfeited if you break the contract.  (There are many ways to get out of a contract that are part of the contract and thus do not break it.)

@William Johnson $10K up front is steep.  You could ask them put $1K or something in escrow with the title company or the seller's attorney or whomever is closing this thing.  I don't know how it works in Quebec.  Really, if it is a good deal, you shouldn't have to worry about your buyer backing out.

@Bryan Watson

Example of earnest money: You want to buy a house, so you make an offer. Usually the RE broker will advise the seller to require a deposit, called earnest money, to show that the buyer is serious and not just messing around, thus wasting everyone's time.

If you're buying, you need to be aware of the terms in the written offer (many times written by the broker). There's usually 2 ways you can get your deposit back. 1. If the seller rejects, or fails to accept, your offer by a specific date. The date needs to be clearly shown on the written offer. 2. The seller may give the buyer a period of time to inspect the property before making the deposit non-refundable. Inspect the property and make a go-no go decision before the deadline.

There are also times where, when you're buying, there is no clause in the written offer making the deposit non-refundable.

The point is, be sure you understand the terms before you give anyone any money.

Originally posted by @Larry T. :

@Bryan Watson Yes.  Earnest money is the deposit that is forfeited if you break the contract.  (There are many ways to get out of a contract that are part of the contract and thus do not break it.)

@William Johnson $10K up front is steep.  You could ask them put $1K or something in escrow with the title company or the seller's attorney or whomever is closing this thing.  I don't know how it works in Quebec.  Really, if it is a good deal, you shouldn't have to worry about your buyer backing out.

 Yes and Judging by the reactions of everybody who I have mentionned this to thus far I will not have a problem getting this paid at the Notary.

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