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Is an earnest money deposit important? What would you do?

By Christine Thierry

Mortgage and Lending with Sterling Home Mortgages 129359

February 23, 2008 02:14 AM

I just received an offer on a property I am selling that is located at the beach (ie it is not a $50,000 fixer upper :)) . The buyers refuse to put more than $1,000 down. The other terms we have worked out are agreeable, not great, but in this market, reasonable.

The buyer's agent said these buyers have never had to put more than $1,000 down, that is why they are sticking to it.

The sales contract does not have a clause that the deposit is all I am entitled to as liquidated damages if they default. So legally, I guess they could be held liable for breaching.

I don't want to lose other buyers while this house sits under contract if these poeple are not serious. How would you handle this? This property has been on the market for a while. I believe many Realtors do not show a property when they see in the MLS it is "pending".

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Karen Anne Stone

New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX

Fort Worth Real Estate

Christine: You forgot to mention the price of the house. If the home has been on the market for awhile... and you have not had other offers... I would not treat this offer lightly. Just pay super attention to their loan, and perhaps ask them to sign a waiver allowing you to talk with their mortgage loan officer to assure you sellers that this is a good deal. If they have a decently high credit score, they may be able to get financing with very little money invested.

Feb 23, 2008 09:13 AM

Kim Skumanick

Keller Williams Real Estate - Tunkhannock, PA

Christine - I am assuming you are the property owner and are represented by an agent. If so, how does this agent feel about the offer? about working with the buyer's agent? are there any other contingencies - mortgage, insurance, inspections, other house sale?

Any chance you could ask for at least another $1000 once inspections are complete?

I once represented a seller who accepted an offer with NO earnest money. The buyer's agent was so apologetic - her buyer was a young veteran who insisted that since his VA loan was "no money down" he intended to write the offer with no money down. We made it work!

Good luck!

Feb 23, 2008 11:26 AM

Roland Woodworth

Blue Cord Realty - Clarksville, TN

Blue Cord Realty

Christine... In our market sometimes it's like pulling teeth just to get earnest money ( Military Market )

As for still getting the house shown... do you have Contigencies such as Active-Financing, or Active-Inspection, or even Active-Sale of Home ? These are great to keep the home showing active on the market. It does say there is a contract, but lets them know that there are triggers... Just a thought

Feb 23, 2008 11:46 AM

Is an earnest money deposit important? What would you do?

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