How do I get my depost?

General Real Estate Investing
1

I feel stupid asking, but how do I get my deposit from a buyer?

For example, when we sign a contract in which I’m asking for 2k as a deposit, does the buyer cut me a check or what? How does this work?

Thanks

2

If you are selling a house to a homeowner that is normally how it works (in my area). The check however is not “held” by you but rather held in the closing agent’s/settlement attorney’s non-interest bearing escrow account. This might vary based on location.

3

Okay, so then do I have to go under contract with my buyer at the title company for them to secure the depost?

Can we go under contract in, say, Starbucks? Then just have the buyer forward the deposit to my title company?

Thanks

4

I prefer having them put the money in escrow, then once there is an escrow deposit slip we sign docs.

Good Luck! :beer

5

Foreclosure negotiator,

Could you give me a breakdown of how to arrange all of this?

For example, lets pretend I have a property for sale and a buyer lined up. Do I need to call a TC and let them know I’m wanting to sell a property and need to set up escrow?

Does the buyer send a check to the TC? Then, once I see the deposit has been made, then I go under contract?

Sorry, this is all very new to me.

6

I’ll give you an example of how I handle things. Tomorrow I am looking at 4 properties. I’ll make an offer on them later that day. When I take the offer to the seller I will include a promissory note stating that if the contract is accepted and signed I will deposit ‘x’ amount in ‘x’ time with my attorney who will also serve as closing agent. That way the seller feels good that if the deposit is not made within ‘x’ time as spelled out in the promissory note then the signed contract is null and void because I did not live up to my end of the deal.

I’ve had sellers say they want the deposit then and there and I refuse to do that because 1) I’m not turning over my money to them unless it’s a firm and 2) If you’re making multiple offers simultaneously you don’t want thousands of dollars tied up in earnest money deposits.

That’s how I roll.

7

pretty much the same. Once they accept my offer the EM is put in escrow as the first step toward the close. Second step is to conduct remaining inspections if any, then sign the docs. Once docs are signed it goes through the title company steps and so on.

GoOD LucK! :beer

8

The easiest way for YOU to do this is to have the BUYER drop off their deposit at YOUR attorneys office. This does two things…

First…Your buyers will feel much more comfortable knowing that an attorney is holding that deposit. I also have the buyer sign the P&S at my attorney’s. That way everything gets notarized, witnessed, and signed correctly and according to your states laws. Remember, if you mess up and they don’t sign the correct disclosures, it could come back to bite you later. DO IT RIGHT THE FIRST TIME!!!

Second…most likely the closing will take place at an attorneys office. Your attorney simply sends an email to the closing attorney or title company stating that he has a $2000 deposit in escrow for the home being sold. That $2000 will then be reflected in the closing documents. After the closing, your lawyer mails you your $2000.

Same thing when YOU BUY a property. Even MORE so then…Let’s say you find a great deal on a home. You ALWAYS bring a VERY basic P&S agreement with you. After you agree with the SELLER on a price, GET THEM SIGNED!! Tell them that your dropping off a deposit check at YOUR ATTORNEYS office for the amount you agree on. I then give the seller a business card from my attorney. I tell them to call him to set up a closing date that is convenient for them. I go to his office, give him the P&S and a check…DONE!!!

The BEAUTY of this is…if there’s a title problem or any other issue with that home it is FAR easier for you to get YOUR money back from YOUR attorney than from some homeowner.

Nice, clean, and professional…do it this way everytime.

9
After the closing, your lawyer mails you your $2000.

Every deal I have ever done the bank would simply take $2000 off of the amount they are loaning me. I suppose it’s a wash but I just wanted to make you aware of other ways of doing things. Good luck.

10

He was asking about what a BUYER would do. If the buyer gives his attorney a $2000 deposit that money is the SELLERS. It’s accounted for in the closing documents and STAYS with his attorney until the sale closes. THEN it’s sent to the seller.

Not a lot of other ways to do this.