Earnest Money Promissory Notes

Joan, this is something I've never heard of either. I agree with Joe, I don't think I would do it either.

Joan  Congtats on the feature - promissory note are used very infrequently in my market

Yes, you could accept a note as a deposit.  You could also accept a goat as a deposit.  In Florida you need the seller's permission to accept anything that is not cash or cashable.  I think the seller would be better off with a goat than a note. 

Joan , I view Confederate Dollars as being more collectable( & valuable too).

Have never had anyone make an offer with a promissory note. Think it create uneasiness in most sellers. But anything is possible and negotiable.

Joan, I have never heard of a promissory note in lieu of earnest money. I am doubtful sellers would like that in my market. 

I don't think I've seen a promissory note in my market.  I would not recommend to a seller to accept one.  Should a buyer default it might be hard to collect any funds.  At least with a check you know it's in the bank per our regulations.

It's rare that we deal with anything BUT a promissory note.  I guess I don't see what the deal is....it's just like a check.  Good for cash on redemption!

Upon acceptance of an offer the buyer takes the earnest money payment to the title company.  RE Agent/Brokerage doesn't have to keep a client trust account.  Win win?

Back in the 1980s, it wasn't unusual to see offers accompanied by a promissory note.  However, I haven't seen one in years.

I remember promissory notes . . . we don't use them in our local market anymore.  They do work well in Short Sales, however because they don't tie up my clients funds.  Other than that, I rarely use them.

Joan,

I haven't seen promissory notes used in over a decade. Sure they're still out there, but as a listing agent, I would never recommend my sellers accept an offer with a promissory note.

Rich

Joan, Thanks for the post. I had one seller sign a promissory note at closing for our commission many years ago , at the suggestion of the Broker and attorney . He was to receive money for relocation from his new job and we receievd a letter from the company too.

Wow, Joan... I've never come across someone offering a promissory note for earnest money in 22 years of doing this. Interesting concept, but I sure wouldn't recommend taking a note to my sellers.

I have never had a promissory note in 10 years, but it would make sense on a VA loan.  If a buyer has difficulty with earnest money in one lump sum, our contract allows us to split up the payments of the earnest money as long as it is all in the trust prior to closing.  Thank you for sharing.  Very interesting concept.

Good post.  I have never come across a promissory note in my transactions in 10 years on the job. 

Joan, in my market we haven't seen promissory notes or irrevocable escrow demands for earnest money deposits since the 1970s.  Most agents in my market wouldn't even understand them now; a 3% deposit is customary.  But, you're right, as long as it's acceptable to the seller, it's not a problem.  But as you point out, it's not very competitive in a seller's market.

 I almost forgot to mention, when I was a brand new agent there was an offer for a listing in my office with 4 chickens offered as Earnest Money.  It was accepted and it closed! 

Hello Joan - this was certainly post that received a lot of comments ten years ago.  I imagine the discussion would be just as lively today.