Lease/option deposit problem - Posted by sam

Posted by Tarun_MD on October 30, 2001 at 02:57:10:

Earl,
I get as much as I can from my tenant/buyers. That way they will think twice before backing out. I don’t set a specific time for them to come up with all the cash since every deal is different.
I just did a deal where the t/ber’s agreed to give me a total of 6k option consideration. They have given me 4.5k already. They’ll give $750 next month, $300 after that, $300 more, and then $150. If I wanted, I could have financed this over a longer period. But in my opinion, its better to get the money sooner. I just sleep better at night that way…lol.
Take care!
Tarun

Lease/option deposit problem - Posted by sam

Posted by sam on October 26, 2001 at 22:57:55:

I had a t/b put $2000.00 down to hold a property for almost a month. They said they wanted there lawyer to check out my contract before they gave me the rest of there money, which was $4500.00 more. They signed the Lease/option deposit reciept. The Lease/option reciept clearly states there are no refunds because of lost opportunites and to cover liquidated damages. The only way I would refund there money is if I rejected there application. Now I get a letter from there lawyer saying that they want there money back. He called it earnest money, even though my receipt clearly states its option money. I turned down 2 other families because of them. I don’t think there entilted to there money back what do you think.

Thanks Sam

I had tenant/buyers forfeit $4500 - Posted by Tarun_MD

Posted by Tarun_MD on October 29, 2001 at 03:09:06:

Sam,
Just recently on 2 houses that I was selling, I had
one woman give me 3k as a deposit on one house and another couple give me $1500 on the other.
The first woman couldn’t come up with the rest for the money(about 6k more) and forfeited her deposit. My agreement cleary says that the money she gave me was non-refundable. I felt that I was entitled to keep the money since I took the house off the market because of her and had to make the mortgage payment.
The second couple was buying the house on a land contract and a week later decided to back out. I was very straight forward with them from the beginning and told them that the money is non-refundable. So they forfeited also.
Just be firm with your tenant/buyers and tell them that anything they give you is non refundable. I also use the term “non-refundable” a lot in my contracts when I sell and have them initial there.
HTH
Tarun

Re: Lease/option deposit problem - Posted by Todd (OH)

Posted by Todd (OH) on October 27, 2001 at 16:59:05:

Sam, you’ve gotten some excellent responses. I would only add that this is precisely the reason why I DO NOT TAKE MONEY FROM PEOPLE UNLESS THERE IS A DEAL! If they want their attorney to look at it, then fine. When their attorney says its ok, I’ll take their money at that point.

Meanwhile, while it sits on their alleged attorneys desk (most likely their non-attorney sister/uncle/brother-in-law’s kitchen table next to the Fruit Loops), I am showing the property to people who are ready to do business.

If they want me to “hold” the property, it will be when they have given me enough money to make it worth my time to meet with them (depending on the deal, at least $500 cashier’s check or more). Non-refundable of course. But we will fill out ALL of the paperwork, and adjust for the move-in date. If they don’t come up with the rest of their funds (i.e. my funds) by the move-in date, their dreams of homeownership and the contract have just self destructed (just like Mission Impossible).

Re: Lease/option deposit problem - Posted by Dee-Texas

Posted by Dee-Texas on October 27, 2001 at 12:10:47:

Hello Sam,
I would spend some money for a consultation with an attorney and show him your contract.
Let me ask you this…do you think…for moment,if it was turned around and the attorney was the one that took the option money…HE/SHE wouldn’t keep the money?..As long as your contract is solid…I would keep the money. Those buyers knew what they were doing. If you explained and pointed out that it was non-refundable…They are BLUFFING with an attorney…
A month? They held your property?
Best Success,
Don’t let EM bluff you…know your business and stand firm.
Dee-Texas

Re: Lease/option deposit problem - Posted by JohnBoy

Posted by JohnBoy on October 26, 2001 at 23:33:32:

How was the deposit reciept worded? Did that allow them a month to have the contract checked by their attorney? Did their attorney find anything wrong with the contract?

Why do they want their money back instead of going through with the deal?

Re: Lease/option deposit problem - Posted by Nathan(oh)

Posted by Nathan(oh) on October 26, 2001 at 23:22:46:

I know that many of the people on here will tell you to give back the money to keep your reputation, I am not going to do that. Whenever I hold a lo for someone with part of the deposit, I make sure they know that I am holding the property for them and I need money to do that. If they do not come up with the rest or back out, it is their problem and they know that. I think that your people do as well, but they are just hoping that the attny. scares you into giving it back. You turned down others and held the property without making any money, therefore you have a right to it and they do not. Even with earnest money, if the buyer does not follow through than they lose the money, that is what earnest money is all about.I realize that a reputation is important and that you do not want to screw people, however you are in this biz to make money and you can’t start giving favors or going back on your own policies. If you do that then you will start doubting yourself and the biz and that can’t happen. There have been many times when I wanted to let my own nice guy feelings get in the way of the biz and I am glad I didn’t. Unless the attny. points out serious problems in your reciept, contract, or policy, then I would keep it and move on. That is just my 2 cents.

Warmest Regards

Nathan

Re: Lease/option deposit problem - Posted by Tim Fierro (WA)

Posted by Tim Fierro (WA) on October 26, 2001 at 23:22:14:

Sounds to me like the t/b has an option to purchase your property within the time specified in the contract. :slight_smile:

IE: They paid, they signed, done deal.

What is typical deposit amt. to hold home? - Posted by Earl

Posted by Earl on October 29, 2001 at 09:50:14:

Tarun, how much do you generally try to get as a deposit to hold the homes and how long do you give the t/b to come up with rest of the funds?

-Earl-