Hello All. Need your help.
Seller requesting a min. $2000 non-refundable earnest money deposit. Only thing is… I don’t have $2000. Is it possible to agree to pay the $2000 deposit within ten (10) days of contract acceptance, contingent upon inspection acceptable to me (buyer) … Or something like that?
I think this would give me time to get a buyer from my list, and get a non-refundable $3000 deposit from my buyer, and give $2000 of it to the seller.
Your help and opinions are appreciated. Thank you.
No self respecting investor would give someone a non-refundable deposit of $2,000 or $3,000 for anything. Every dime you pay to the seller should be contingent upon the agreed terms of sale. Earnest money is meant to keep you from breaking the agreement and thus would be considered “damages” for the seller. However, if you stay within the contingency clauses in the agreement, the deposit should be returned to you. This seller might be hiding a crack in the foundation big enough to lose a leg in and you’d be out $2,000.
I have had wrestling matches over earnest money before. I offer $500 I will go up to $1000 for earnest money. The problem is that (here in Texas) when you actually buy the house, the earnest money appears as a credit at closing. You don’t get it back until you sell the house. That is money that you can’t use to rehab the house buy appliances or anything. I won’t tie up $2000 like that. I don’t like to tie up $1000 like that. I have passed on a deal that wanted 2% (about $2000) earnest money before.