Special offer

The First Impression That Can Tank Your Offer

By
Commercial Real Estate Agent with Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker AZ BR 528507000

Uh boy . . .

I reviewed an offer with a long-time, quite sophisticated client recently.

The offer itself is clean; offer price is reasonable, terms reasonable.

The seller client was ready to reject it outright, though.

ONE thing was off . . . right at the beginning.

The earnest deposit.

Relative to the offer price, it was noticeably low. WAY low.

And the seller could not get past it. 

"It's just not a serious buyer!" 

A weak earnest deposit, some may argue, is usually refundable anyway beyond a certain point . . . but it STILL shouts either 'don't have money' or 'not serious' . . .

and I'd say OKAY! Your deposit is refundable, so WHY NOT PUT ONE THAT COUNTS in at the beginning to get your offer accepted!

IT IS, after all, part of your offer! 

Make the 'first impression' . . . impressive! 

🎵When that gorilla pounds his desk I fall to bits, I confess, I admit
I'm impressed🎵

 

 

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Comments(41)

Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
NC Real Estate Transition & Relocation 919-602-848

Exactly. We really have to educate our clients here and some still insist on offering lower due diligence or earnest money. Sometimes they have to lose a house or two before they get with the program.

May 25, 2023 06:40 AM
Candice A. Donofrio

Sometime it is their 'HERO AGENT' who suggests the lower dollars and sets them up to fail over a few bucks . . . I am writing a post about that right now in fact!

May 25, 2023 07:05 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

If a buyer wants the house, a higher EM amount will speak to the seller. It usually does...if everything else aligns with their set expectations!

p.s. Love the song BB.

May 25, 2023 07:17 AM
Candice A. Donofrio

It does and it's almost entirely 'perceptual' . . . but the reverse is a killer! 
💖👒BB! 

May 25, 2023 08:48 AM
Ginger Harper
Coldwell Banker Sea Coast Advantage~ Ginger Harper Real Estate Team - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

Great post.  Thanks for sharing

May 25, 2023 07:42 AM
Candice A. Donofrio

Thank you lovely!

May 25, 2023 08:48 AM
Sheri Sperry - MCNE®
Coldwell Banker Realty - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Candice,

I love that feature image.  As others have noted, it tells the whole story.  If the "earnest" money is weak, then it is not very "earnest," is it?  !!

May 25, 2023 08:08 AM
Candice A. Donofrio

Exactly what the seller said . . . I had to talk her off the ledge for that! (We asked for a big deposit and got it, but it could have been easier!)

May 25, 2023 08:49 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Love that feature photo that says so much, Candice. Some buyers just don't realize the fishy first impression a low EMD conveys, even more so in a competitive market. Sellers certainly are aware.

Jeff

May 25, 2023 05:22 PM
Candice A. Donofrio

I had to have that picture, because it also showed how potentially slippery the offeror could be.

May 27, 2023 07:20 AM
Marte Cliff

That picture reminded me of an attorney I had the misfortune to deal with. He was one of only 2 men I've ever met who made me think I was shaking hands with a dead fish. A couple of months after the closing in his office I read that he had been disbarred. Couldn't have happened to a nicer guy!

May 27, 2023 11:05 AM
Diana Zaccaro Broker Associate
ZOOM Realty Group - Cocoa Beach, FL
"The Accidental Blogger" Cocoa Beach, Florida

That old expression "Money talks" is still true but there are a lot of people who have not learned that lesson yet. 

 

May 25, 2023 07:41 PM
Candice A. Donofrio

The perception of money for sure. A lot of people don't have money but they know how to make the impression that they do. That gives them leverage.

May 27, 2023 07:20 AM
John Juarez
The Medford Real Estate Team - Fremont, CA
ePRO, SRES, GRI, PMN

I disagree. Silence is not a counter offer. Silence is a rejection of an offer. End of story. A counter offer is perpetuating engagement and may lead to a sale.

But you already knew that.

May 26, 2023 09:46 AM
Candice A. Donofrio

Call it what you want! LOL

May 27, 2023 07:19 AM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

The topic is earnest money is one of my secret weapons in whether my offer (if I represent the buyer) is accepted or not, especially in multiple offer situations. I'll leave it at that, in case one of my local peers is reading... :-)

May 26, 2023 12:25 PM
Candice A. Donofrio

Thank you maam!

May 27, 2023 07:21 AM
Toby Barnett
KW North Sound - Marysville, WA
Toby Barnett

I'm just here to say, I can't handle that picture. 😀

May 26, 2023 02:15 PM
Toby Barnett
KW North Sound - Marysville, WA
Toby Barnett

I wholeheartedly disagree on this post. Just because some people may not have the liquid cash doesn't mean they are less qualified to purchase the property. I find people with higher earnest money deposits are quicker to withdrawal based on some arbitrary home inspection item. Earnest money doesn't mean much to me especially if the buyer qualifies for the loan, I know their selling broker, and I know their lender.

May 26, 2023 02:19 PM
Candice A. Donofrio

It is the perception of being qualified to a seller that may not know buyer, lender or the other broker. Thanks for stopping by!

May 27, 2023 07:23 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Interesting discussion - fun seeing different points of view.

May 27, 2023 11:07 AM
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

A low emd suggests that either they aren’t committed to the deal or they aren’t as cash flush as they would like to seem. Generally the former

May 28, 2023 03:40 AM
Candice A. Donofrio

Yep!

May 29, 2023 10:58 AM
Eileen Burns 954.483.3912
Trans State Commercial Realty Inc. - Fort Lauderdale, FL
FLorida Real Estate Connector

You only have one time to make a great first impression.  I would have suggested an additional deposit to be made 24 hours after inspection was completed along with proof of funds to close the transaction.  😎

May 29, 2023 10:01 AM
Candice A. Donofrio

Typical in commercial deals - and deposits going forward 'hard' . . .

May 29, 2023 10:59 AM
Edward Gilmartin
CRE - Boston, MA

Probably wise to look at offer in its entirety . In a normal market you can bet a seller wouldn’t act this way

May 29, 2023 10:16 AM
Candice A. Donofrio

I've never seen a super low deposit close a deal . . . in ANY market. I suppose a really motivated seller might be okay giving it a shot, though . . . 

May 29, 2023 11:05 AM
Edward Gilmartin
CRE - Boston, MA

If the owner is qualified and he offers the most then it’s time to take the offer . Esp if there are no crazy contingencies

May 29, 2023 01:38 PM
Candice A. Donofrio

If the owner is qualified? LOL

There have been moments I wondered

It's not always about who offers the most, either. Just like you said earlier, it's the entirety of the offer. And just like I said earlier the deposit is a first impression. Thanks for stopping by!

May 29, 2023 01:39 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Savvy investors/clients know that a solid offer includes a decent Earnest Deposit!  Great share!

May 29, 2023 05:01 PM
Candice A. Donofrio

Thank you maam. 

May 29, 2023 06:35 PM
Jim Harper
Atlanta Communities Real Estate - Marietta, GA

Hello 

Candice A. Donofrio. The pic got me - I laughed . Out loud, alone in the home office. Although I would have read on anyway.  I think some did not get that you were talking about a commercial listing. And some would wonder, what's the fuss? It's just a deposit. But you are touching on the psychology of the parties. And a person of means, as Seller, says"if I were buying, this deposit is just a cost of doing business." Always enjoy your words.

May 30, 2023 07:21 PM
Candice A. Donofrio

I was not specifically referring to commercial deals.
Even residential deals need the strength of a realistic deposit.
THANK YOU for noticing that it is the PERCEPTION of strength in the deposit, that can affect the seller's opinion of the offer. 

May 31, 2023 05:18 AM
Jana Holmstrup
Jana Holmstrup - CCO - Kings Mortgage Services, Inc. - Visalia, CA

Wow! As a buyer I've always relied on my Realtor to tell me the EMD amount.  Usually a flat amount of percentage of offer.  Never knew it was part of the acceptance criteria.  Is this new?

May 30, 2023 08:04 PM
Candice A. Donofrio

No. But if your agent suggests a certain deposit amount, it is great that you listen :D

May 31, 2023 05:19 AM
Kimo Jarrett
Cyber Properties - Huntington Beach, CA
Pro Lifestyle Solutions

Sellers IMO should always seek the advice of their Realtor when determining to accept or reject an offer to purchase.

May 31, 2023 12:26 AM
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

I usually ask my buyers to give a better than average Earnest Money deposit ... it does speak volumes to the listing agent and their seller.  It's another term that helps the buyer be in the deal and usually helps them win the bid!

Jun 03, 2023 11:54 AM