OfflineI asked a couple of RE attorneys who place lots of offers through their realtors every week how to get around having to put down earnest money on every deal that is accepted. (Not talking about FSBO's)
A person who makes lots of offers could go broke trying to find all that earnest money on every deal that is accepted!
They said that they write a promisory note in place of the earnest money when making lots and lots of offers. On closing day the earnest money is paid by your end buyer. They told me to try it...it works many times.
I lost my realtor last week so I can try this until I get another realtor.
Those of you who have realtors can you try a promisory note and see if it is accepted and post your results here?
It works for the attorneys so I can't see why it wouldn't work for everyone.
"THE ARCHITECT OF YOUR DESTINY IS YOURSELF"
"SUCCESS WALKS HAND IN HAND WITH FAILURE"
Well put Michael!
Attract Private Investors to fund your deals so you can do more deals while using Other People's Money (OPM). For more info go to:
http://www.mcssl.com/app/aftrack.asp?afid=1029023
Regards,
John <>< Future DG & DL REI Billionaire
ASPEN PROPERTIES "I BUY (ALL CA$H), HOLD, LEASE & SELL Commercial and Residential Properties" ANY LOCATION, ANY CONDITION, ANY PRICE
http://ctaffordablehomesforall.usapropertywholesale.com/
Here's what I, I give my realtor a $100 check with no name on it, they make a copy of it and submit with the offers. You only need to come up with the money if they accept your offer.
... Verses: 35 "but those who hope in the Lord will renew their strength. They will soar on wings like eagles; They will run and not grow weary, They will walk and not be faint." Isaiah 40:31 ...
I used a note as EM/Down payment (there is no need for both)against my house.
A note works best when it is backed by something of value.Make sure it is re-
turned or credited as part of escrow instructions,this is very common in no
money down deals.You may be able to borrow the equity from a relative or friend.
Bye
Mel
in court....
I have never used EM ,(never had to)you get into trouble when you let your
agent negoiate for you. ...To be legal a contract
must be bilateral equal for both signees,millions of $$$ in R.E.has been
bought and sold with only a handshake.
This is the best explanation of EM that I've seen and now it makes sense!
Berks County, PA Property Finders-RE Property Locators for Cash Investors: http://berkspropertyfinders.com/
Berks, Schuylkill, Lehigh and Immediately Surrounding Areas
work today. I am having proplems coming up with the funds and I don't want to keep on offering on properties when I don't have the funds.
Thanks again
I read the creative ways of covering the earnest money deposit. All are somewhat understandable and may already have answered the questions I've had in my mind, but if you don't mind, I need them more explicitly explained...If I make many offers and maybe four out of twenty are accepted for different homes, how can I cover myself with earnest money or hard money for all the accepted homes? Will I need to just choose one out of the four to focus on instead? Will the money I place in escrow as earnest money be used as only a number to cover all four offers?
If you are putting in your offers with the same Realtor, they should be able to use the same copy of one EMD check for all of your offers.
Good luck!
Julie Wakefield
John and Julie Wakefield
JCW Properties, LLC
Hi everyone
Has anyone ever had to deal with a realtor who says that they have to have proof of funds or proof of financing before they can put in an offer on a property? My realtor is willing to do assignments, but he says that 98% of all realtors and/or mortgage companies are requiring this letter.
How do I handle this? Any advice would be helpful.
Thanks
Nancy D.
In California, we have no deal without a good faith deposited into escrow within the time specified in the purchase contract. No deposit from the buyer, no deal. Typically 1% of the sales price - liquid funds that can be deposited and clear the buyer's account. I know of no seller, intelligent or otherwise, who would accept a $100 good faith deposit or God forbid a promissory note to tie up their property in escrow. Absolutely never going to happen. And proof of funds is also required within seven days if you use a California Association of REALTORS purchase contract. REALTOR is a trademarked term. To use that term, the licensed agent or broker must also be a paying member of NAR, their state association AND their local association. If not, they are just a licensee and not a REALTOR, and will have other contracts they found somewhere online that may be suspect or less than legally binding - know what you are signing. Finally, if you can't provide proof of funds, you should not be purchasing real property.
Assignment contract
SELLER..P/A.....YOU..A/C......CASH BUYER..A/C P/A
Assignment contract $5000 FEE
EM $1000
ESCROW
YOU TAKE HOME $4000
STILL A GOOD DAY IF YOU ASK ME.
http://insiderscash.com/
http://besttransactionfunding.com/
http://www.coastal-funding.com/
Has anyone ever had to deal with a realtor who says that they have to have proof of funds or proof of financing before they can put in an offer on a property? My realtor is willing to do assignments, but he says that 98% of all realtors and/or mortgage companies are requiring this letter.
How do I handle this? Any advice would be helpful.
Thanks
Nancy D.
I've tried using the one from coastal-funding in the past. The broker didn't accept it. I'll have to try the others.
I like the logic and those sayings Frank Outlaw you the MAN!
Ive made offers where the earnest money is split, The Maine realtors contract has it in it. I might start with $10 but then after the contingency of the inspection is up agree to increase it to a more favorable amount. That way you have minimal out until you know youre gonna move forward with the deal... Does anyone else do this?
A pocket listing is a real estate industry term used in United States which denotes a property where a broker holds a signed listing agreement (or contract) with the seller, whether that be an "Exclusive Right to Sell" or "Exclusive Agency" agreement or contract, but where it is never advertised nor entered into a multiple listing system (MLS), or where advertising is limited for an agreed-upon period of time. In Canada, this is referred to as an "Exclusive Listing".
When a broker is hired to sell a property, a listing agreement is executed in writing. In an "Exclusive Right to Sell Agreement", the broker normally agrees to cooperate with other brokers and to share a portion of the total real estate commission paid by the seller. However, in this situation, it is stated that the property shall not be placed in an MLS, and thus there is no agreement to work cooperatively with other brokers.
An alternative form of Agreement might be "Exclusive Agency" where only the broker is given the right to sell the property, and no offer of compensation is ever made to another broker. In that case, the property will never be entered into an MLS.
The reasons for a pocket listing may vary from the need for privacy or secrecy to discrimination, and some sellers may have their own reasons for not advertising a listing in conventional ways, including wanting to sell only to certain types of people.
Many full-time agents have knowledge of pocket listings in their own office or in other offices of their own company. While many MLS systems may try to limit this type of listing by requiring execution of a written notice relative to the benefits of MLS publicity, they may encourage members to refrain from taking pocket listings. There are some companies which list property as pocket listings for a short time before entering it into their MLS. With the written agreement of the seller, this would allow the company to try to obtain both the listing side and the "selling" side of the commission, an industry term known as "both sides of the transaction".
A real estate company which is not a member of any MLS may have pocket listings, but may still be willing to cooperate with other real estate professionals in the sale of their listings.
A broker or agent having a Pocket Listing can sometimes imply that the property will be sold directly to a buyer by the seller's agent.
Comparison with open listings
Pocket listings are not "Open Listings". An open listing is an Agreement between a seller and a broker whereby the property is available for sale by any real estate professional who can advertise, show, or negotiate the sale, and whoever brings an acceptable offer would receive compensation.
Real estate companies will typically require that a written agreement for an open listing be signed by the seller to ensure the payment of a commission. "For Sale By Owners" (FSBOs) often also offer open listings by signing an agreement to pay a broker who brings them an acceptable offer, but these will usually not be pocket listings.
Advantages
Pocket listings may give buyers an extra advantage when searching for real estate which is not advertised anywhere else. These special properties, while under listing contracts, may be unique because they are sold privately and may never be intended to be listed on the Multiple Listing Service (MLS). Many property owners want to sell their real estate, but do not want the aggravation associated with showing the property. This is especially true in a slower market where sellers of real estate want buyers, not just curious people.
On the other hand, sellers genuinely want to sell their property and will show it to serious buyers. To ensure this, the seller typically has a real estate broker who qualifies a potential buyer on their availability to purchase. A very important benefit to the seller is that the transaction typically only has one real estate agent, thus potentially lowering the overall commission costs.
By directly connecting themselves with sellers' agents, home buyers eliminate the need for a buyers agent (although they will lack buyer representation). If the buyer's objective is to look at all the available homes for sale in a given area, they would need to look at MLS and all private listings for sale. Only then, would they have completely exhausted their search.
Ultimately, the seller must decide if exclusion from the MLS is in his/her best interests and does not limit exposure on the market.WIXS
There are several ways to get around putting up too much earnest money on every deal, especially on REO property where the bank expects up to 10% of the purchase price. Make your offer with a $100 EM deposit and say that it will be increased to the full amount of 10% of the purchase price or whatever is necessary after the contingency period. Since it isn't non refundable until then the bank shouldn't care. Then get your buyer in place and have him put up the rest of the EM deposit and then some so that you are covered if he falls out of contract before the closing.
Those are good info for as new comers.
Thanks,
Peter
The Greatest Glory is not in Never Falling, But in Rising every time you fall!
Hi Richard,
You can just write into the inspection clause of your contract - that if the property fails your inspection and you are not able to conclude the contract successfully, all earnest money paid is to be returned to buyer.
Good Luck!
Kind Regards
Belle
Talk to you soon James,
Michael Mangham
MD Home Acquisitions LLC
Whats has caused me longer to get a deal done than I wanted was worrying way too much about the little things.
"Does this exit clause say it perfectly right, in the right font, should i put it in italics?
Did i write this bandit sign EXACTLY line dean wrote it in 30 Days to Fast Cash?
OMGOSH the deal doesnt look like the deals Ive seen other people get, its a dead deal.
I HAVE to get an LLC otherwise people wont take me serious. Even tho Ive never done a deal!
Oh man, I missed an investor meeting cause I had to work, I NEEDED A BUYER FROM THAT CLUB!
Geez, people are calling my signs to take them down. Guess they dont work."
These and other thoughts that didnt matter constantly ran threw my head and they are the little things I think most people spend too
much time thinking about.
Adam Macias
If you have the ability to pay an EMD then I think it is safe to assume you have a couple hundred dollars to protect this money and all future EMD's. Consult with an experienced Real Estate Attorney either hourly or flat rate to help you understand and draft a solid contract that is in compliance with all local/state legislation.