Ths deposit/downpayment issue? - Posted by mark lowes

Posted by JPiper on December 14, 2000 at 15:24:36:

First, there’s a difference between an earnest money deposit and a downpayment. Earnest money is money deposited under the terms of a contract which will be forfeited in the event of a default by the buyer. The downpayment is part of your payment for the house as prescribed either by the lender or by the seller in the event of owner financing.

Chances are that when you enter into a contract you are not putting up the down payment…that will come at closing. You are putting up an earnest money deposit.

When I assign a contract I simply make my assignment fee high enough to reflect the recovery of any earnest money I may have put up with the intial offer itself.

My preference is to get my assignment fee upfront. The contract is now assigned to the assignee who will perform the contract. Part of that contract will be the earnest money that I had originally put up.



Ths deposit/downpayment issue? - Posted by mark lowes

Posted by mark lowes on December 14, 2000 at 09:14:18:

Hi guys

Thanks for the assistance last time I posted a message - great stuff!!

I am still confused about one thing though, how does the deposit or downpayment come into play when using an assignment of contract? Do I put a deposit in with the offer and re-coup it with the new buyers deposit whom I have assigned the rights to, or is there some other way around it?

Feedback is much appreciated

Mark Lowes