Posted by Tim Fierro (Tacoma, WA) on January 18, 2002 at 23:05:29:
Make all the offers with an EM note payable upon successful inspection. That way the only EM you give is on properties you are actually going to acquire.
about my realtor… - Posted by ct
Posted by ct on January 18, 2002 at 21:32:52:
We’re sitting in the office looking for houses and I asked him if I want to make an offer on 15 houses can I just give him 500 smacks and we use it for each offer and he said no it’s against the rules.What would you do as investor?thanks in advance.ct
Re: about my realtor… - Posted by tjohnston
Posted by tjohnston on January 19, 2002 at 14:00:28:
you can set up an escrow account with your lawyer. they only verify that you have the money in escrow not that you have 20 offers on it.
Earnest Money - Posted by Jim Kennedy - Houston, TX
Posted by Jim Kennedy - Houston, TX on January 19, 2002 at 06:17:25:
Add a clause to your purchase offer that reads:
“Buyer shall deposit $500.00 as earnest money with XYZ Title Company as escrow agent, within _____ days of Seller’s acceptance of this contract.”
This way you only have to write a check for those offers that are accepted.
Alternatively, when making multiple offers, you might write an earnest money check for each offer and add a clause that instructs your broker to hold the check uncashed until Seller’s acceptance of the offer. If you don’t want to buy more than one property at a time, simply withdraw the other offers once the first one is accepted.
Whichever you decide to use, check to see if it complies with the rules in your state. In some states, it may be against the rules for brokers to hold uncashed earnest money checks.
BTW, if your agent tells you that either of these clauses is against the rules, ask for the specific cite and verify it yourself. You’d be amazed at how often agents will tell you “it’s against the rules” or “it can’t be done that way” when in reality they should be saying “that’s not the way it’s customarily done”.
FYI, the standard purchase agreement form promulgated by the Texas Real Estate Commission (TREC) contains a clause that reads:
“Buyer shall deposit $_________ as earnest money with ______________ at _______(Address), as escrow agent, upon execution of this contract by both parties. Additional earnest money of $ must be deposited by Buyer with escrow agent on or before ___________. If buyer fails to deposit the earnest money as required by this contract. Buyer will be in default.”
Routinely, I fill in the first sentence of that clause and put “N/A” in the blanks regarding additional deposit. It’s interesting how often I “forget” to deposit the earnest money until I’m reminded to do so by the Seller’s agent. What’s even more interesting is the number of times that no one catches it even at closing when the closing statement shows that no earnest money was ever received by the escrow agent. If I had to hazard a guess, I’d say that I end up depositing earnest money on less than half of my offers on listed properties. What a great job those listing agents are doing protecting the interests of their sellers.
CAVEAT: I do run the risk of losing the deal if I fail to deposit the earnest money as agreed. The Seller could claim (and rightfully so) that I’m in default. It hasn’t happened yet, but it certainly could. When I’ve had a particularly sweet deal or other issues start getting sticky during escrow, I’ll pony up the earnest money just to be on the safe side.
Hope this helps.
Best of Success!!
Jim Kennedy,
Houston, TX
Re: about my realtor… - Posted by terryr
Posted by terryr on January 19, 2002 at 24:07:58:
offer him a dollar an offer as contingency money - in illinois all offers have to b presented no matter what the earnest money