OT-I didn't realize home buying required so much

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Jason_W
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OT-I didn't realize home buying required so much

Post by Jason_W »

Cash on hand just to get the ball rolling. We made an offer on a place and had to also put down a deposit as a show of good faith to the seller. Our realtor suggested $500 now and $500 after the seller got the lot surveyed and finished subdividing out the parcel.

She came back at us want a 7500 dollar deposit. Our realtor suggested we try for 3k. We can probably do 3k over the next few months, but not on short notice.

I guess I'm learning a lot.

Apparently, another buyer is interested (and most people have more on hand resources than us) but this could be a bluff.
homefront
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Post by homefront »

this could be a bluff.
It probably is, but real estate proceedings can be an expensive inconvenience to the seller as well. Sometimes a buyer isn't all they claim to be, which wastes the sellers time and could cost a legitimate sale. The person who sold us our home played that game with me, and I had to add $ to the offer. Later we found there was no other buyer, the sweet little old Mennonite lady just wanted more $ :x .
A good lawyer is a must; not all realtors can be trusted.
Best of luck!
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Post by Old Ironsights »

Better Cash on hand than a "Zero-Zero" ARM that bites you later.
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Post by cnjarvis »

When I bought mine I had to pay $500 in "earnest money" as a show of good faith which I would get back if the deal fell through. (IIRC) I don't understand what the seller is wanting as a "deposit".

I also had to pay 5% down, cost of inspections and closing costs. Other than that it was relatively painless. I think I wound up paying around $7500 in cash by the time I was done.

Remember to take a new pen when you do the closing - you're going to need all that ink!
Last edited by cnjarvis on Fri Jan 11, 2008 12:34 pm, edited 1 time in total.
WinM71
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Post by WinM71 »

It has long been known that a home is a concrete-lined hole in the ground into which you pour money.
My mind reader refuses to charge me..........


Now listen boy, I'm tryin' to teach you somethin'. That ain't an optical illusion, it only LOOKS LIKE an optical illusion.
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Post by Jason_W »

WinM71 wrote:It has long been known that a home is a concrete-lined hole in the ground into which you pour money.
At least I get own a money pit rather than help pay for someone else's.
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Post by Old Ironsights »

WinM71 wrote:It has long been known that a home is a concrete-lined hole in the ground into which you pour money.
Better than into a Landlord's bank account...
C2N14... because life is not energetic enough.
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Post by Jeff Quinn »

I bought mine at the lumberyard, and assembled it myself.
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Post by cutter »

Good luck. Breathe deeply if you have to.

My opinion? A buyer is on his own. The seller is out to sell, the realtor(s) are out for a check (ie. not your friend), wait for closing you'll see.
Take your time, think things over, ask for second opinions, get everything in writing. The 'bluff' used in realstate is the 'got to do it now' scam.

It's tough , I know, but take your time. If you notice, they are always making you wait, then need a sudden answer. Make them wait for you, while you think it over or get a second opinion.

Hang in there buddy.
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Post by Hobie »

I have found that with guns, cars, or houses (it ain't a home until you at least move in) that "I understand if you don't want to sell it to me but this is my best offer..." works and when it doesn't you really didn't want that particular item. I can say I learned that the hard way but relatively early in life. Being willing to walk away is the biggest weapon you have to bring the cost down rather than allowing it to escalate.
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Jason_W
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Post by Jason_W »

Sure is nerve wracking as a noob.
Noah Zark
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Re: OT-I didn't realize home buying required so much

Post by Noah Zark »

Jason_W wrote: . . . I guess I'm learning a lot . . .
I'm afraid you are learning the hard way, too.

First, the realtor works for the SELLER, not you, unless you hire a realtor to work on your behalf. This is true whether the realtor you are working with works for the listing agency or not. The realtor is being paid by the seller through the listing contract commission, and it's in the realtor's best interest to get the best deal for the seller -- the realtor gets a larger commission.

Second, you must make a written offer, and that MUST spell out the terms, including any depsit or down payment. A realtor CANNOT take a verbal offer to a seller, it MUST be in writing. That's not to say that a realtor doesn't speak to the seller in general about a potential offer, but my point is this: Once you make the written offer and it's accepted, the seller cannot come back and change the terms, wanting more of a deposit.

Third: Don't confuse "deposit" with "down payment." They are two different things. A deposit is "earnest money," showing that you are making a serious offer "in good faith." I've only pruchased homes in rural areas, and $1000 to $1500 has been sufficient.
IF the seller is asking for $7000-some for a "deposit" or "earnest money," I'd flat tell the realtor no, that's unreasonable. It would help to call around to orher realtors and ask what is typical for an offer deposit so that you can stand your ground. Tell the realtor that you feel that you will go $1000 in deposit, and that you realize that the offer contract binds you to purchase and the homeowner to sell, contingent on other terms. You don't see where $7000 of "good faith" is required, because IYO that's excessive. Remind the realtor that he told you $500 and $500, ask him what's changed? Remind him that he's in the business, and working for the seller, so he should have had these points already covered with the seller in the listing agreement, not now.
However, if the realtor is talking about a $7000 DOWN PAYMENT, that's something altogether different. The down is how much money you have to come up with, and the bank furnishes the balance under the terms of your mortgage.

Fourth: IMO the realtor and seller probably do have another potential better offer in the wings. They are trying to make YOU decide not to go forward with it. However, IF the seller has accepted the offer, they cannot ask for more $$ in deposit than the amount stipulated in the offer.

Fifth: If the realtor and seller insist on the $7000 deposit, I'd walk.

Sixth: Have you included in your budget numbers such things as heating fuel, electricity, trash collection, water and sewerage, property taxes, homeowners insurance, closing costs, general savings, savings for college, employer 401K, etc? How much are you relying on two incomes? What about kids, or additional kids after you buy the house? Have you budgeted for kids? Have you budgeted for vehicles or vehicle repairs and wear and tear items like brakes and tires?

Seventh: Don't automatically accept boilerplate terms in a written offer. The first home I bought the seller wanted 60 days to remain in the house after closing. I said no. The realtor was trying to convince me that this was a realistic requirement to allow the former owners to get their things pack and get moved. I finally agreed, but got the realtor to write into the contract that the seller owed me weekly rent in the amount of prorated mortgage, taxes, and insurance, with a full week's rent due for any part of a week in the house. The seller was out in less than two full weeks, but if I'd have gone along, he would have got two months' free stay in MY house.

Eight: Your offer should be contingent on your being able to secure "financing suitable to your needs" in a reasonable period of time like eight to 12 weeks, or the deal's off and you get your full deposit back. Don't let the realtor tell you you can't do that.

There's so much more I could tell you. Best of luck, and remember, if this one falls through, it wasn't meant to be. The first house I was interested in fell through at the offer step and looking back I am SOOO glad it did.

Noah
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Re: OT-I didn't realize home buying required so much

Post by Jason_W »

Noah Zark wrote:
Jason_W wrote: . . . I guess I'm learning a lot . . .
I'm afraid you are learning the hard way, too.

First, the realtor works for the SELLER, not you, unless you hire a realtor to work on your behalf. This is true whether the realtor you are working with works for the listing agency or not. The realtor is being paid by the seller through the listing contract commission, and it's in the realtor's best interest to get the best deal for the seller -- the realtor gets a larger commission.

Second, you must make a written offer, and that MUST spell out the terms, including any depsit or down payment. A realtor CANNOT take a verbal offer to a seller, it MUST be in writing. That's not to say that a realtor doesn't speak to the seller in general about a potential offer, but my point is this: Once you make the written offer and it's accepted, the seller cannot come back and change the terms, wanting more of a deposit.

Third: Don't confuse "deposit" with "down payment." They are two different things. A deposit is "earnest money," showing that you are making a serious offer "in good faith." I've only pruchased homes in rural areas, and $1000 to $1500 has been sufficient.
IF the seller is asking for $7000-some for a "deposit" or "earnest money," I'd flat tell the realtor no, that's unreasonable. It would help to call around to orher realtors and ask what is typical for an offer deposit so that you can stand your ground. Tell the realtor that you feel that you will go $1000 in deposit, and that you realize that the offer contract binds you to purchase and the homeowner to sell, contingent on other terms. You don't see where $7000 of "good faith" is required, because IYO that's excessive. Remind the realtor that he told you $500 and $500, ask him what's changed? Remind him that he's in the business, and working for the seller, so he should have had these points already covered with the seller in the listing agreement, not now.
However, if the realtor is talking about a $7000 DOWN PAYMENT, that's something altogether different. The down is how much money you have to come up with, and the bank furnishes the balance under the terms of your mortgage.

Fourth: IMO the realtor and seller probably do have another potential better offer in the wings. They are trying to make YOU decide not to go forward with it. However, IF the seller has accepted the offer, they cannot ask for more $$ in deposit than the amount stipulated in the offer.

Fifth: If the realtor and seller insist on the $7000 deposit, I'd walk.

Sixth: Have you included in your budget numbers such things as heating fuel, electricity, trash collection, water and sewerage, property taxes, homeowners insurance, closing costs, general savings, savings for college, employer 401K, etc? How much are you relying on two incomes? What about kids, or additional kids after you buy the house? Have you budgeted for kids? Have you budgeted for vehicles or vehicle repairs and wear and tear items like brakes and tires?

Seventh: Don't automatically accept boilerplate terms in a written offer. The first home I bought the seller wanted 60 days to remain in the house after closing. I said no. The realtor was trying to convince me that this was a realistic requirement to allow the former owners to get their things pack and get moved. I finally agreed, but got the realtor to write into the contract that the seller owed me weekly rent in the amount of prorated mortgage, taxes, and insurance, with a full week's rent due for any part of a week in the house. The seller was out in less than two full weeks, but if I'd have gone along, he would have got two months' free stay in MY house.

Eight: Your offer should be contingent on your being able to secure "financing suitable to your needs" in a reasonable period of time like eight to 12 weeks, or the deal's off and you get your full deposit back. Don't let the realtor tell you you can't do that.

There's so much more I could tell you. Best of luck, and remember, if this one falls through, it wasn't meant to be. The first house I was interested in fell through at the offer step and looking back I am SOOO glad it did.

Noah
Thanks for the good advice. My realtor is representing us, we signed that agreement last night.

The 7500 the seller wants is earnest money. It's simply not going to happen.
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Post by edsguns »

Jason, This may sound a bit silly but as a licenced realtor in 2 states, I'd make sure on your part, just who this realtor is working for. If it's the listing agent for the seller, he/she is working for them, not you. Get a good description and definition on the types of agency legal in your state. And make sure any realtor talking to and suggesting to you, is actually working for YOU! GOOD LUCK! I like little in this life more than assisting someone in buying their first house and living at least a bit of the American dream.
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Post by Jason_W »

edsguns wrote:Jason, This may sound a bit silly but as a licenced realtor in 2 states, I'd make sure on your part, just who this realtor is working for. If it's the listing agent for the seller, he/she is working for them, not you. Get a good description and definition on the types of agency legal in your state. And make sure any realtor talking to and suggesting to you, is actually working for YOU! GOOD LUCK! I like little in this life more than assisting someone in buying their first house and living at least a bit of the American dream.
I know for a fact that our realtor isn't working for the lister or seller. He is legally contracted to represent us. He seems like a good guy, but I realize his salary still comes from making sales.
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Post by mohavesam »

I have never paid more than $300 in earnest money and always had my own terms slip of paper noting that if the deal is cancelled by the seller he must return the money within 24 hours to avoid a recovery charge. :wink:

Last house we bought (residence) was $525 closing complete costs. Line through & initial any charge you don't like or cannot be explained.

If you're buying a house or lot or used car, as soon as the seller or his agent sees that you're in a position of weakness, you start spending money. That could be as simple as a dreamy look in your eye or a wife's insistence that "I want this house!", but that's the hook.

Stay loose, there is another dream house around the corner. Make sure time is on your side.
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Post by Hobie »

I have never paid any "earnest" money. If it is standard around here I guess I'm just ignorant of it.
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Jason_W
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Post by Jason_W »

Maybe things are a little weird around here. Definitely more expensive than rural or semi-rural places in other parts of the country. I know this place probably wouldn't fetch 100k if it were in rural Maine or the south.
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Post by dr walker »

Jason, The way the real estate market is right now, go slow and be ready to walk away if you dont get exactly what you want and more. There are so many home owners bleeding out serious cash, they just want out. I dont know about Vermont but down here in southwest Florida we still have another 10% to drop before things get back on track. There are many pre-foreclosure and forclosure sales happening here. It is only going to get worse with all of the crazy mortgages maturing. Good luck and take your time.
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Re: OT-I didn't realize home buying required so much

Post by Jason_W »

Noah Zark wrote:
Jason_W wrote:
The 7500 the seller wants is earnest money. It's simply not going to happen.

$7500 is nuts to ask for deposit. What city/state is this taking place in?

Noah
I'm in Vermont. One of the most expensive rural states ever.

The new offer has earnest money of $500 now and another $3000 within 45 days. I can get that by cashing in most of my APL.

At least I get it all back upon closing.
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Post by stretch »

Be careful! Remember that a realtor is just a
"used house salesman". That's it! He or she works
to get that big, fat commision check. The more they
can sell the home for, the more they get paid.

$7500 "earnest money" is nuts. It's obvious the seller
is going to use it to get the land surveyed, soils tested,
etc - at YOUR expense. You'll never see that money
again! I'd walk away from this one - it stinks to high heaven!

-Stretch
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Post by TedH »

I have bought four houses so far in my life, in various places all over the country. I have never been asked to pay more than $500 earnest money. Something smells fishy there with the $7500.

As it has been said, the best weapon is to show you are willing to walk away.
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Post by cfplinker »

Does the earnest money go directly to the seller? IIRC the last time I bought a house (quite a few years ago) my earnest money went into an escrow account and the seller could only get it if I backed out of the deal. A friend of mine bought a house where the previous deal had gone sour. When he found out about that (during negotiations and prior to making the final offer) he reduced his offer by the amount of the first persons earnest money -- and got the house.
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Post by Jason_W »

cfplinker wrote:Does the earnest money go directly to the seller? IIRC the last time I bought a house (quite a few years ago) my earnest money went into an escrow account and the seller could only get it if I backed out of the deal. A friend of mine bought a house where the previous deal had gone sour. When he found out about that (during negotiations and prior to making the final offer) he reduced his offer by the amount of the first persons earnest money -- and got the house.
That's how it's working here. The money goes back to us when we close. If we default on the contract, the seller gets it.
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Post by Leverdude »

We almost bought a second house a few years ago. Its like our first tho since we bought this one direct thru the previous owner, no bank, no realtor.

Anyhow here they asked 1% as a binder.$1700 in that case. We got it back when the deal fell thru. It never got cashed & was made out to our realtor.
She was my wifes friend & said she worked for us. I disagree since she gets a commision. Just not in her interest to get us a deal.
I guess my only point is, if that binder was the same as "earnest money" its sort of held until the deal gets closed. The owner cant use it because its not made out to him. Matter of fact nothing is. Everything goes through the lawyers.

Regardless $7500 seems nuts.
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Post by Charles »

Jason... Things differ from state to state, but a ernest money deposit in excess of $1,000,00 is totaly out of bounds, half of that is more like it. I also would question who a realtor is working for. I suspect what will happen is, the owner will want to apply that amount to the price of the house. They are wanting a down payment or the realtor is tryingto get his commision up front. No way Jose!!! This is a buyers market and not a seller's market.

You are going to need as much cash as possible when you get to the mortagage stage. The down payment is paid when you close the sale not when you sign the contract.

If the deal fall through for some reason, you will play hell getting your money back from those sharks. You can probably get it back, but it will be a year or two down the line and with some heavy attorney's fees.

There is a glut of real estate in these United States and folks that own it are scared and doing some very strange things to make a sale or get a little money in their pocket. Developers and folks who own lots of real estate are running as fast as they can to stay ahead of bankruptcy.

Screw em.... The buyer is in the driver's seat these days.

For a mortgage I can recommend Ditech. They offer competitive rates and has very little red tap. In reality they are the financial arm of General Motors and the branch that is keeping the whole lash up afloat. They are straight shooters and offer very good customer service.
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Post by cutter »

NEITHER REALTOR WORKS FOR YOU!

A honest and well educated realtor can be found, but remember their commision comes from the sale, and if that means doing whatever to speed things up, well you know...

I'm not trying to discourage you, but you should understand this.

I truly hope things work out for you. It took me three years to buy my first house, and I had cash. I also had good friends to guide me, and had studied the market so I could better spot a scam.

Good luck.
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Post by gon2shoot »

It's tough to get started, and everyone you deal with is trying to get all they can. Know what you can afford, know what you want and try to find somthing that fits.

My Dad told me somthing one time about property, "you'll never get the piece you truly want, you will always pay too much for it, but God ain't makin any more.
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Post by The Lewis »

Jason, It ain't cheap to but a house here in Vermont! Well, within any proximity of Burlington anyway. What part of Vermont are you in? I do know someone here in the Burlington area with a LOT of experience buying and selling real estate and loves to talk about it, he's a good barometer for a fair deal and knows the good and bad realtors, pm me if you want and I'll connect you. Good luck!
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Deposit

Post by HEAD0001 »

Do not take this personally. I sold mobile homes for several years. I also just finished selling a couple of homes for family members. I required a deposit of $5,000 on a $145,000 home.

If a person can not come up with $5,000 cash for a deposit, then IMO they are not a buyer. I would never tie up my $145,000 asset for a $500 deposit-----would you???

A buyer will walk away from a $500 deposit, but they will think twice before they walk away from $5,000.

Also if you put down a large deposit the seller will seriously consider your offer, rather than just blowing it off. The larger your deposit, the better you look as a solid buyer to the seller. Believe me all people involved want things to go the simple way. And CASH makes it more simple. Tom.
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Re: Deposit

Post by Tycer »

HEAD0001 wrote:Do not take this personally. I sold mobile homes for several years. I also just finished selling a couple of homes for family members. I required a deposit of $5,000 on a $145,000 home.

If a person can not come up with $5,000 cash for a deposit, then IMO they are not a buyer. I would never tie up my $145,000 asset for a $500 deposit-----would you???

A buyer will walk away from a $500 deposit, but they will think twice before they walk away from $5,000.

Also if you put down a large deposit the seller will seriously consider your offer, rather than just blowing it off. The larger your deposit, the better you look as a solid buyer to the seller. Believe me all people involved want things to go the simple way. And CASH makes it more simple. Tom.
That's not the way the market works in Denver, Minneapolis or Asheville or Atlanta. $500-1000 is plenty.
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Andrew
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Post by Andrew »

I paid $100 to get my house. The amount was meaningless, it was the gesture that was important.

The way banks throw out money today I don't see why somebody would be worried about the amount of the "good faith" deposit?

I paid for a $200 appraisel(sp), $1300 for the closing costs, and had the entire house financed for $23,350.
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Post by omgb »

Well guys, on my first house in MT, I paid $500 earnest money that was refundable if financing fell through. Total cost of the house was $65,000 and that was in 1990. On the second house, I paid $500 down with the same terms. Cost of the house was $178,000. That was in CA in 1992. Now I'm on my third hous, bought last August. That required gulp, $15,000 earnest, non-refundable. The total cost of the house was $609,000 and again, it is in SoCal. This last house was a bank foreclosure and was selling for 80K under market. Even with the drop in prices it still is valued at over $670,000. Here's what I learned from all of this:

No agent works for the buyer in spite of what the papers say. They want a sale period. Now, I actually had a couple of agents that would not carry my price and terms to the seller. They actually balked at the size of my offer. I fired them. Then I found one that would follow my orders. That's how I got the foreclosure.

In this market, unless you are dealing with a bank sale, I would hesitate putting up too much as earnest money and I would always get it in writing that you get all of your money back if financing falls through. Then, get pre-approved for a set amount and present proof of that upon submitting an offer. This is a buyer's market. Every freaken thing is negotiable, everything.
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Re: Deposit

Post by HEAD0001 »

Tycer wrote:
HEAD0001 wrote:Do not take this personally. I sold mobile homes for several years. I also just finished selling a couple of homes for family members. I required a deposit of $5,000 on a $145,000 home.

If a person can not come up with $5,000 cash for a deposit, then IMO they are not a buyer. I would never tie up my $145,000 asset for a $500 deposit-----would you???

A buyer will walk away from a $500 deposit, but they will think twice before they walk away from $5,000.

Also if you put down a large deposit the seller will seriously consider your offer, rather than just blowing it off. The larger your deposit, the better you look as a solid buyer to the seller. Believe me all people involved want things to go the simple way. And CASH makes it more simple. Tom.
That's not the way the market works in Denver, Minneapolis or Asheville or Atlanta. $500-1000 is plenty.


I worked in sales all my life, so maybe that is why I may be considered a hard ***. And I may even be wrong. The one thing I learned about being in sales is that there are alot of "buyer's" out there that really are not capable of buying. If you want a seller-banker-or broker to really take you serioulsy then cash is KING. That is just the way it is.

I am glad I was not in those markets, because my house would have never been sold. I would never have let my house be tied up for 30 to 60 days for $500. And if I did let them tie my house up for 30 to 60 days I dam sure would not give them there money back because of their inability to obtain financing(unless it was my fault-or they could not get a suitable appraisal), Tom.
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SteveR
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Post by SteveR »

What does your lawyer say about the rather huge "deposit"?? I think as other have said, they used your money to sub-divide, soil perk tests, and surveying fees.

I would be careful before signing anything without your lawyer looking it over, once you sign a contract, even if the realtor says it is just to "hold" the property, because what ever is in that "offer" you are legally bound to it.

Good luck with the new home, I hope they are on the level, but remember buyer be ware!!

Steve
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Post by omgb »

Asking for $1,500 to 3,000 up front contingent upon financing is fair for all of the reasons mentioned above. But, it must go into an Escrow account, it absolutely must. Anything else is an invitation to a rip off. You must also specify terms for return of said if the sale falls through.

Cash is not really necessary if you have pre-approval for a specified amount. That shows ability. $1,500 earnest shows intent.

Please don't take my statements about agents as a mark against them. Even an honest agent (and I believe most are) are not YOU and thus are not nearly so interested in your welfare as they are in theirs. You and only you have an unconflicted interest.

California has the most stringent real estate sales and disclosure laws of any state in the union. I suspect that's because we have more lawyers and deadbeats pre square foot than any other state too. Any way, all of that aside, buying a house is tough work. You must be prepared to negotiate and to risk a certain amount of money in the deal. When the banks began to give me some grief about the full terms of our deal, I was ready to walk away from my $15,000. I'm not rich by any means and that money would have taken me 5 years or more to replace but.... When dealing with a 30 year contract and mortgage payments of $3500 or more amonth, 15K was cheap compared to being trapped into bad terms. I calculated the risk ahead of time, gritted my teeth and dove in. In the kind of deal I was doing, one had to be prepared to risk some cash to get the price, others weren't and my deal got accepted.

Things are no longer so competitive. I seriously doubt anyone else has placed an offer on that property given today's market. Do not be pushed and do not let the seller dictate your terms. Do you really want it that badly? Are there not similar properties for sale elsewhere?

Anyway, that's my $.02
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Post by HEAD0001 »

[quote="omgb"]Asking for $1,500 to 3,000 up front contingent upon financing is fair for all of the reasons mentioned above. But, it must go into an Escrow account, it absolutely must. Anything else is an invitation to a rip off. You must also specify terms for return of said if the sale falls through.

Cash is not really necessary if you have pre-approval for a specified amount. That shows ability. $1,500 earnest shows intent.

/quote]

I completely agree about the Escrow account. And I also agree about having your lawyer handling the transaction. However I disagree a bit about the cash. And you are right $1500 does show intent. But $5,000 shows commitment. If you are trying to get a seller to take you seriously, and to accept a lower offer then I stand by my statement of Cash is KING. Sometimes if you spend a little you can save alot.

As I posted earlier I sold manufactured homes for a few years. Believe me when a customer walked in with $5,000-$10,000 in cash(check) I would bend over backwards to get them in a mobile home, and a lower price was usually the way to do it. When a person walked in and balked about putting down $500 it was hard to take them seriously. Even if they were serious. Tom.
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Post by Rusty »

Jason,
If you haven't yet now is the time to be talking to a lawyer. It's a small price to pay for sorting out everything. I'll never go to a closing again. That's what he gets the bucks for. I can't read that stuff fast enough anyway.

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Post by omgb »

I agree, $5,000 shows a commitment to the sale. In CA, a deposit of 5K is pretty much standard. Putting money up front does indeed help to get the terms you want. It works the same way with a car too. In the afore mentioned deal, 15K got the banks to turn away the other couples that were looking at the house we wanted. At closing, I had to carry foreword another $125,000 in cash so as to avoid PMI and to get a better interest rate. The fact that I could do that on a mortgage of that size helped to get me the terms I wanted.

The bank had lost money on my house. It had a first and second against it for over $660,000. There was damage to the flooring and it had an upstairs leak that ruined the dining room ceiling. It went on the market for several weeks last year with no takers. Then it was pulled off, fixed and painted with new carpeting and new wood flooring and then put back on the market. Total time in foreclosure was a little over 18 months. The bank listed it for $660,000 the first time and then $625,000 the second. We offered $615,000 with 15K down and a guarantee of $125,000 in cash at closing. They jumped at it. Mid way through they wanted to back out on some repairs plus the funder wanted to shift terms on us. I was unwilling to meet those terms and started to walk. The bank came back with a reduced price of $609,000 and an expedited escrow. The rest is history.

Very scary. I'd never spent so much, risked so much or worked harder to buy anything in my life. I'm glad I did though. I've got a $3,200 sq foot executive home in a very upscale neighborhood. Fifteen years from now when I retire, I'll sell out for over a million and I'll have a good $600,000 in equity to invest in retirement property outside of the PRK. This was also a perfect way to spend my new raise without falling into a higher tax bracket.
Last edited by omgb on Sat Jan 12, 2008 10:30 pm, edited 1 time in total.
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Post by Jason_W »

The earnest money does go into an escrow account in this case. The seeler can't use that money to get the subdivision done because she won't have access to it unless I break the contract.

I also have a property inspection contingency addendum to the contract that states we get out deposit back if an inspection turns up any huge problems.
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Re: Deposit

Post by Andrew »

HEAD0001 wrote:And if I did let them tie my house up for 30 to 60 days I dam sure would not give them there money back because of their inability to obtain financing(unless it was my fault-or they could not get a suitable appraisal), Tom.

"Tied up"? Is it not still your house when they walk away? Why on earth would you need to keep their money? Are you under the notion that you've earned it somehow?

Last time I checked getting money for nothing fell under 2 catagories: Charity and Stealing.
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Post by Jason_W »

The Lewis wrote:Jason, It ain't cheap to but a house here in Vermont! Well, within any proximity of Burlington anyway. What part of Vermont are you in? I do know someone here in the Burlington area with a LOT of experience buying and selling real estate and loves to talk about it, he's a good barometer for a fair deal and knows the good and bad realtors, pm me if you want and I'll connect you. Good luck!
I live and work in the Waterbury area and the house we're looking at is in Waitsfield.

We get the double whammy of being close to Burlington and being in ski resort alley.

Property taxes are sky high in this state to boot.
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Re: Deposit

Post by HEAD0001 »

Andrew wrote:
HEAD0001 wrote:And if I did let them tie my house up for 30 to 60 days I dam sure would not give them there money back because of their inability to obtain financing(unless it was my fault-or they could not get a suitable appraisal), Tom.

"Tied up"? Is it not still your house when they walk away? Why on earth would you need to keep their money? Are you under the notion that you've earned it somehow?

Last time I checked getting money for nothing fell under 2 catagories: Charity and Stealing.
Absolutely, it is tied up for 30 to 60 days. Accepting a deposit and an offer effectively takes your house off the market for that period of time. And yes you did earn the deposit. If you check sales figures the first 1-60 days is the best time to sell your house(when you list it). After a house has been listed for more than 60 days it is harder to sell. It is no longer a "NEW LISTING". So yes, IMO you earned it if the buyer backed out.

And who kept paying the utilites, and the up keep for that time perriod.

It is not the seller's responsibility if the buyer is ill-prepared. Or does not have the ability to make up their mind. Tom.
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