Ok so once I find a motavted seller or start negotiating with a real estate agent to buy a house and my offer get accepted by the seller, will i have to pay any money if I can’t close the deal or if I can’t find a buyer?
With the for sale by owner you can put up a $10 deposit and put in the contract when you want to close. If you don’t find a buyer you can always ask for an extension. With a Realtor you will need to put up a deposit up front or when you offer gets accepted. If you cant find a buyer you can ask for an extension which they may or may not give you. If you can not find a buyer you will have to either close with your own funds (I wouldn’t) or lose your deposit.
Bradenman,
I just sent a seller of a vacant house a contract with a $10 deposit. The seller balked and wants $500. I don’t know if I will have a buyer lined up so I don’t want to risk my money. I would rather walk away from the deal …there are plenty of other potential properties out there. I believe that if I don’t take it to close because I can’t find a buyer I will be the one who loses the deposit. Am I right? I don’t have $500 lying around the house…I am quite suprised that the seller is putting up a fight about the deposit. The house has been vacant for over 3 years and they are worried about tying up the house for 45 days with a little deposit??? WTH? must not be very motivated…at least that is how I look at it…what do you think?
Doesnt sound motivated at all
If your offer on a property has been accepted by the seller and you put down a deposit, if you cannot close you will lose your deposit. This is considered liquidated damages for the seller. It is always advisable to put in your contract some exit clauses which allows you to kill the deal and get your deposit back.
Most Realtor contract have a mortgage contingency clause. As well as, inspection, lead paint, title contingency. Some investors even put in “This contract is contingent upon complete approval by business funding partner.” This clause is similar to the mortgage contingency so you can kill the deal and still get back your deposit.
Understand though, when putting in contract contingencies, it makes your offer weak. So it is better to do your due diligence and evaluate the deal thoroughly (know your entry point and exit strategies), negotiate hard, then put in a strong offer.