Questions about making lowball offers thru realtor - Posted by Dan

Posted by JPiper on November 19, 2000 at 24:14:13:

Just a technicality. A Broker would be unable to “hold in escrow” an earnest money deposit unless you had an accepted contract. Escrow accounts when audited are reconciled against accepted contracts. If a Broker held a deposit with no counterbalancing contract his escrow account would be deemed out of balance…cause for loss of license or other penalties.

Earnest money given with an offer is typically held uncashed, and not in escrow. Once the offer is accepted then the earnest money must be deposited within a prescribed number of days according to state law. If an offer is then terminated, and both parties to the contract agreed to it’s refund, it must be paid out of the escrow account…not held.

Again, escrow accounts are always balanced against accepted offers. Serious business for the state auditors.


Questions about making lowball offers thru realtor - Posted by Dan

Posted by Dan on November 18, 2000 at 12:06:41:

Hello all,
I have a realtor that does a keyword search for me, looking for “vacant”, “motivated”, “anxious”, “transferred”, etc. in the MLS listings in my area.
my question is, if I make lowball offers (say 70-75% of asking price) on these properties that the realtor finds, what continguincies should I put in the contract? If I get the properties under contract, I would then try and “flip” the properties by the time closing gets here and have a double closing, closing with my buyer first. This is pretty much how Steve Cook operates in Baltimore so maybe he is the one to ask this to. Also, what is done about the earnest money deposit when making multiple offers?
Thanks in advance for any responses

as to deposits… - Posted by CArol

Posted by CArol on November 19, 2000 at 21:50:59:

we never make one until an offer is accepted. Our contracts (via a broker) call for a modest (or meagre!) deposit within 48 hrs of acceptance of offer. That way we don’t have checks wandering about awaiting someone’s OK on a contract.

Questions about making lowball offers thru realtor - Posted by SCook85

Posted by SCook85 on November 18, 2000 at 23:14:02:

Jim pretty much summed up what my answer would have been. I’m constantly amazed at how often people think I offer 70-75% of list price- never have I said that. You will get yourself into a lot of trouble if you do this. Assume I have a home that is worth only $50k and I’m asking $100k for it, are you goint to get a good deal if you offer me 70% of my asking price and I accept it. Of course not.

Before you go off using this method I suggest that you know the values of the homes like the back of your hand. I rarely have to check comps anymore because I know the values in the neighborhoods that I buy in so well, you should also.

As far as earnest money deposits, I started out doing exactly what Jim said.

Good Luck.

Steve Cook

Re: Questions about making lowbal - Posted by dewCO

Posted by dewCO on November 18, 2000 at 21:17:31:

For the earnest money, you could also use a promissory note, to be replaced with a check/good funs by xx date, upon acceptance of the contract.

Here ya go! - Posted by Jim LaVerdi (Phx_Az)

Posted by Jim LaVerdi (Phx_Az) on November 18, 2000 at 16:23:42:


If I were making lowball offers through realtors it wouldn’t be 70% of asking price! It would be more like 70% of the property value. (After it’s fixed up) If it needs any repair work then that figure would be subtracted from the 70% offer.


I would have only one included if you want the realtor to take your offer seriously. The only contingency I ever include going through a realtor is the “Approval upon final inspection” That will cover anybody in any situation. You just find some reason that your not satisfied and say it (Done Deal)


When making multiple offers through realtors you can give them one (1) deposit for earnest money and have them hold it in escrow. Have an agreement for them to apply it to the first accepted offer. You can have 10 offers being made with that one deposit and don’t let any realtor tell you different!

I hope this helps answer some of your concerns, and best of luck to you Dan

Jim LaVerdi (Phx_Az)