Representing my clients to the fullest
I recently closed a short sale on one of my listings in Chandler, AZ – 2800 East Jade Place, Chandler, AZ. Wow, did it take a long time to close this deal – listed the home in October 2010, delayed the foreclosure auction 4 times and had the 1st buyer back out (due to financing) 10 days prior to the most recent auction date. Luckily, we had a cash buyer in backup position that was able to close within the 10 days.
I’m writing this post today to talk more about the cancelled contract than the successful close on this home. Specifically, I want to speak about how important it is for buyer’s to understand that the earnest money is their commitment amount. If the buyer doesn’t purchase the home, this earnest money is what they will forfeit. There are certain contingencies in the standard Arizona Association of Realtors (AAR) purchase contract that allows the buyer to cancel the contract and receive their earnest money back – cancellation during inspection period, appraisal contingency, financing contingency to name a few.
In this situation, the buyer’s agent didn’t submit the cancellation notice due to financing in the required time period, the buyer ended up losing their earnest money. By the way, this earnest money was $15,000 , not a small amount. More importantly, my client, the seller was entitled to the $15,000.
I always tell my buyer’s that while there are certain ways to get the earnest money back, it’s not guaranteed. Every buyer has to assume that the Earnest money is money that they could lose if the deal goes bad. It’s my job to manage the house purchase process so that this doesn’t happen and luckily, I’ve never had a client lose their earnest money due to cancellation of the contract.
Just as important, if I represent the seller, it’s my job to make sure that if the real estate purchase doesn’t come to fruition and the buyer cancels the contract, that my client get’s the earnest money. Remember, there is a cost to the seller when they put the house to pending status – they had to take the home off the market, perform buyer requested repairs to the house, make other housing arrangements after the house sells and pay for an extra mortgage if the house doesn’t close. My client is entitled to some type of compensation for these items and as part of my fiduciary responsibility; I will go after the earnest money.
Some people say that this is being ruthless. Actually, all it means is that I’m representing my clients to the best of my abilities. Buyers, sellers and agents have to understand that this is a business transacation and that all parties are signing a contract. This can’t be taken lightly. As a professional real estate agent, my responsibility is to represent my clients to the fullest.
Advanta Real Estates