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Author Topic: $1 Earnest Money Deposit on REO Offer  (Read 6212 times)

Offline DemosL

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$1 Earnest Money Deposit on REO Offer
« on: October 07, 2008, 02:40:35 pm »
I belong to Peter Conti's Insiders Group. I saw a video of his the other day that mentioned I could put a $1 earnest money deposit on REO properties. Has anyone done that? I spoke to two local Realtors (that I thought I could use as Buyers Agents to present my offers) about the small deposit. They felt offers with such a small deposit would not get accepted.

Since I'm a wholesaler, I would want to assign my REO contracts to other investors. They didn't think this would fly either.

I have nothing to lose by making offers with ridiculously low earnest money depoits and assigning the contracts to other investors, so I started contacting listing agents with my initial offers. We'll see what happens.
http://quickcash-nova.com
I am a wholesale real estate investor in Northern Virginia. I do local and virtual deals.

Offline JaredfromIndiana

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Re: $1 Earnest Money Deposit on REO Offer
« Reply #1 on: October 07, 2008, 03:12:00 pm »
I bet I know what happens.  You get zero response.  If I was selling a house and somebody came to me with a $1 earnest money check I wouldn't even look at their offer or take them seriously.  You do have a lot to lose by doing what you say you are going to do, you won't be taken seriously and get a bad name QUICKLY.

Take some time and read in the wholesaling forum here, both of your questions have been discussed in length already.  Good luck!

Offline DemosL

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Re: $1 Earnest Money Deposit on REO Offer
« Reply #2 on: October 07, 2008, 04:26:37 pm »
Thanks for the reply. I do know that $1 and $10 earnest money deposits (EMD) are accepted a lot for non-bank owned properties. This is probably not the case for bank owned ones. First, I have to have an offer accepted before I have to worry about the EMD on the contract.
http://quickcash-nova.com
I am a wholesale real estate investor in Northern Virginia. I do local and virtual deals.

Offline JaredfromIndiana

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Re: $1 Earnest Money Deposit on REO Offer
« Reply #3 on: October 07, 2008, 05:05:19 pm »
Actually no, you need to send a check or a copy of a check for earnest money with your initial offer.  Again, if they see a check for $1 they will not respond. 

Offline Roger J

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Re: $1 Earnest Money Deposit on REO Offer
« Reply #4 on: October 07, 2008, 08:06:01 pm »
No other way to say it.  You will be seen as a joke, a person that has no knowledge of how the system works and a complete waste of time for the agent(s) involved.  When you do finally learn, you will have burned some major bridges that likely won't get rebuilt.

And you cannot assign a REO contract.  Most standard state contracts specifically forbid assignments without the seller's written approval and the banks usually require that their P&S contracts be used, which state that you CANNOT assign this contract.

Raj
www.HickoryNCHomes.com Search for all Hickory NC Homes for Sale.

Offline tampasteph

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Re: $1 Earnest Money Deposit on REO Offer
« Reply #5 on: October 07, 2008, 09:31:57 pm »
I agree with the above.

Sure, you can offer a dollar as your deposit, but you will have a really hard time being taken seriously. 

Most  banks usually want to see at least 1k (although I know some people who put down $500). 

I have gotten away with putting only a few bucks down on a homeowner deal, but I would not try that with an REO.

Good luck,
Steph :cool

P.S.
I find it kind of disturbing that they are advising you to do that.  Are you paying to be a part of the Insider's Group?

 




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