Let's talk about deposits. You may hear the term EMD, GFD, earnest money deposit, or good faith deposit. The contract is written, with an agreed-upon good faith deposit submitted at the time of the offer. Sometimes, the agreement can call for a second deposit, maybe after the inspection time is complete. This deposit can be held in escrow by either the listing agent, buyer agent, or a third party like a title company.
Can a buyer get their money back? Not always.
One reason IF dates are missed. Maryland has a time is of the essence clause, so important it is the first paragraph on the first page, and it is boxed and bolded.
That means it is an excellent idea to pay attention to all the dates, including
applying for a mortgage, ordering the appraisal, and the various home inspections. Other timed deadlines are the receipt of HOA or Condo documents. There is a five-day deadline for Home Owner Association review and seven days for Condo Document review.
The more inspections, the more cost to the buyer...the more skin in the game!
Always read and understand the contract. With as many as 40-50 pages, the offer needs to be summarized, reviewed, read and understood. Make sure you have gone over the contract line by line.
In a transaction, every extra page, paragraph, or blank line, is there because someone had a problem severe enough to get those changes made.
As an agent, you need to protect your client's deposit. On one occasion, I asked the buyer for $10,000-non-refundable... not an everyday practice.
The reason, this buyer had written an offer, negotiated, went under contract. Within the week, they withdrew ( buyer's remorse) based on receiving the documents. A week later, they realized they made a mistake and wanted the property! I had to go back to a very savvy agent and convince them to reconsider this buyer.
What did I have other than their word?
Knowing the seller would be very cautious and in need of assurance,
I suggested that the buyer offer a nonrefundable $10,000 to the seller if they did not settle. Showing intent to move forward, the seller graciously accepted the offer, and we had a quick, smooth cash closing.
Questions about deposits on a home
Call Margaret Rome