Agents giving buyers earnest money

Big red flag going up!  If they are applying for a loan, the earnest money must be sourced.  If it doesn't come from their own funds, they will need a gift letter.  It is highly unlikely that the underwriter will accept a gift letter from the agent in the transaction.

I haven't ever done that, haven't considered it.  If they can't afford the earnest money deposit, they aren't ready for home ownership IMHO.

Patricia - WHOA!!!  As Kathy says, red flags waving all over the place.  First and foremost, while I am not 100% certain that CA Realtors/agents can't participate in the transaction this way, I'm pretty sure they can't.  Need to go and check on that now with DRE. 

Secondly, you are absolutely right about the u/w asking for verification and source of any and all funds and a buyers agent putting up the EMD would not be part of an arms length transaction.  Lastly, I completely agree that if a buyer doesn't have the EMD, they're not prepared to purchase a home.  NEXT!!!

Not a chance on God's green earth. Unless the buyer is my daughter, it just ain't gonna happen.

Absolutely not, no way and no how!  That's just craziness.  First, I am pretty sure we can't do that, second, if they cannot come up with the earnest money and have to wait for pay day, then they cannot afford a home at this time.  Tell em to wait a couple of paydays and then see what happens.  Never heard of such a thing.  Wow!

Patricia, Truthfully to make a deal happen and get a promissory note from the buyers I would do it if it was ok and ethical.  Of course I would max the amount to lend to the amount of my take home commission.