The bank does have their own addenda, and they are commonly
provided by the listing agent.
Really, you make my argument about the earnest money. It’s quite
true that you won’t get your earnest money back IF you back out of a
deal against an accepted contract. Isn’t that the whole point? If you
give yourself no contingency, and you stand to lose something if you
back out of the deal, then you’ve made a strong offer. When I make an
offer I don’t back out…and I think that’s the point. Evidently YOU want
to keep your options open by making a smaller deposit.
It will not be the only criteria, but the bank WILL be influenced to an
extent by a larger deposit. I’ve never made a deposit on an REO offer
as small as $1000. But I’ve never backed out of an offer either.
I would suggest making the offer on your local realtors association
form. Since most REOs are listed with a Realtor, either call the listing
agent up or get your own Realtor. I’m always partial to using the
listing agent because they get the entire commission. I feel like that
helps me, might even give them room to lower their commission if they
want to make a deal. Obviously you need to be confident in your own
skills if you use the listing agent (keep in mind they don’t represent
you).
I like all cash offers, with nearby closing dates, with no contingencies,
but subject to a clear title report. I like to put up a large earnest money
deposit. I don’t think there is any particular need to include the entire
purchase price. The point though is to make your earnest money large
enough to know you’re serious.
Banks usually have their own addenda, and you will have to use their forms. Also, the bank will usually have a certain minimum earnest money amount already specified in their instructions to the listing agent.
I have never put up more than $1000 earnest money an REO. The bank will look at your proof of funds to see your ability to close. They will gauge your seriousness by your offer. No contingencies, all cash, quick closing date all suggest you are serious.
Large earnest money deposits just tie up your capital, which you may not get back if you want to back out of a deal. The bank won’t be impressed by the size of your earnest money deposit.
The bank does have their own addenda, and they are commonly
provided by the listing agent.
Really, you make my argument about the earnest money. It’s quite
true that you won’t get your earnest money back IF you back out of a
deal against an accepted contract. Isn’t that the whole point? If you
give yourself no contingency, and you stand to lose something if you
back out of the deal, then you’ve made a strong offer. When I make an
offer I don’t back out…and I think that’s the point. Evidently YOU want
to keep your options open by making a smaller deposit. That makes
your offer weaker.
It will not be the only criteria, but the bank WILL be influenced to an
extent by a larger deposit. I’ve never made a deposit on an REO offer
as small as $1000. But I’ve never backed out of an offer either.