Hi there. Recently I decided to buy a home, I went out, got my pre-approval, ironed out all the "could be" problems, got a 6.62@30 year conventional with 20% down (whatever I bought) approved. So then I go house shopping. I find a real estate agency and start looking at homes. I find one home I really like. I think well, this is probably the one, I would like to put an offer down on it. The agency asked me to send in a 1000.00 earnest money agreement without even having a purchase offer. I have never bought a home before, but everything I read says the money goes in with the offer. I ask about this. I get told, oh yeah yeah, we can do everything through fax... I start thinking, this is odd, I don't have a purchase agreement and they want 1000.00 check. Maybe I really don't know what I am doing; better hire an attorney. So, I riffle through the local white pages and find a female attorney, (yay!). I leave a message for her to call and in the meantime speak to her secretary and ask her about this. She says, no. You do NOT send money until you send in the purchase offer. So I relay this back to the realtor. He sends me in the purchase offer. I fax it over to the attorney. She looks at it, calls me back. She has to go to court, and will call me tomorrow but she finds it a little odd that under the addendum of inspection both the "Check Option 1A (automatic waiver if buyer does not disapprove inspection) AND Check Option 1B" (seller's opportunity to repair if buyer disapproves of inspection) are BOTH checked. I call the agency back, they say, oh that's so you could pick either one. I thought that the offer to purchase became a contract if the seller agrees? What the heck? Anyone come across stuff like this before? Does this sound weird to anyone out there? (cross posted to several forums - sorry if it bothers anyone)
Hi there - I bought a house in Feb with FHA. The "Ernest Money" is proof to the seller that you're not playing games, that you're indeed a serious buyer. In our case we had to write out two checks out for $1,000 each. The check was cashed only if the seller agreed to the offer, the second was to be cashed 30 days later. The funds was put into a seperate account, set up and held by the broker, in case something happened. If we backed out, then the seller would have the $1,000. If the contract goes through and the loan is approved, then the $1,000 will go towards the closing costs. I.E. if total closing costs was $5,000 then you need to bring a money order for $4,000. I asked the same question about the ernest money, since this was my first house I was afraid to just give money out, but it does work out in the end. Feel free to ask questions about the loan buying, etc - I know the advice I got here helped out a lot! GT
DanceRat, Does this agent work for you or the seller? If this agent does not work for you (meaning, not a buyers agent), I would go elsewhere. In NC, the agent must state for whom he or she works. Ask that agent. As far as the money - don't worry. Yes, it's normal. However, you DO NOT have to refuse an inspection. In fact, I would put a contingency in the agreement that it must pass inspection from your own privately hired inspector. If these people are making your uncomfortable, take your business elsewhere. My advice would be to ask friends or family or co-workers about agents they used. Good luck and congrats!
Re: Anyone who has bought a home, h Would you send in 1000.00 without a purchase offer? that's what made me pause - not sending in earnest money, I understand that - but sending money without a signed offer was a little off I haven't signed or read anything about an agency disclaimer and I had thought in WA that was also a necessary After I talked to the lister about my request for the seller to share closing costs, she said that wasn't done in WA because the seller already has to pay so much I am glad I have an attorney
DanceRat I agree that having an attorney is probably a very good idea. You can easily justify the relatively small cost by avoiding pitfalls that could be big financial boo'boo's. Some of the mistakes you might not even find out until years later when you go to sell the house. You're doing the right thing by asking lots of questions, and not signing or sending anything until you get answers that you are comfortable with Congratulations, BTW !!! ps...did you ever get anywhere with Unique Collections, my co/library felon? if,so can you post to the NanaC thread that I put up tonight?
Re: DanceRat Dance Rat, You have a right to be suspicious. I have never known anyone that has sent in the earnest money without a purchase offer...it just doesn't sound right. Also, why would the realtor check both boxes, if you were to choose one? Is your realtor the selling agent, by chance? If it is, my suggestion is to find a buyer's agent, the realtor works for the seller, not you. Since the seller pays the realtor's commission, what you want comes second. Speaking with the lawyer was a good choice. If you really want the home and it is too late to find a buyer's agent (or if your deal has already been accepted) I would suggest keeping the lawyer. So far she is the only one watching out for you. Welcome, to the joys of home buying. Dani
Re: DanceRat Just bought a home...first time. Ours was an abbreviated process because we looked, applied for a mortgage and closed all in 3 weeks. We had a buyer's agent who was a professional Realtor. She was great! Very responsive to our needs, showed us houses that were within the range we wanted--didn't push the envelope in hopes of making a big score. So it's a good idea that you at least have an attorney working the issue, you'll need one eventually. I'd recommend that you look into finding a buyer's agent. Ours was from a major RE company so she was a big help when it came to explaining various "tips, tricks and scams" that selling agents would try to pull. Especially on first time buyers. Do not give them any money without a signed offer! Our house actually had an offer on the table when we saw it on a Sunday. But our agent got with us that Monday, wrote up the contract and took $800 over to the listing agent that evening. She had already arranged for us to be pre-approved for our mortgage. Since our offer was for full price and we were willing to do a fast settlement (the owner was tranferring out of state), he took our offer. Good luck! Don't let the process get you too crazeeee
Re: DanceRat Always be very cautious(which i think you have been), the average real estate agent turns out to be very bad. It is often better to work with a broker, not an agent as they will have gone through more education and using a buyer broker is a very good idea as well. And if you want cheap good advice talk to Title company agents. I've seen some that can run circles around lawyers(its what they do everyday) and they want your bidness! My brother who is a real estate agent is always amazed at how many laws are broken on a regular basis by agents(if only the client knew!). For example he's had agents tell him their client was probably going to lower the price...eennntt can't disclose that!!! Anyways if you want to send a check without a purchase agreement you can send one over to me at 3289 bustamante st.....(I've got a bridge to sell you--CHEAP)
Re: DanceRat Thanks everyone!! I got an answer back from my attorney today and she changed a ton of stuff - for instance, there are tenants in their now and a waiver of inspection was checked and etc. etc. So now I just faxed it off and am waiting for them to do their revisions and then I will sign it and give them the earnest money. This is SUCH a learning process.
Re: DanceRat It is a VERY good idea to go to your assessors office,(or on line in many Counties) and take a look at the records for that property. Find out if the "tenants" are legally renting, check the zoning,take a look at nearby property for absentee owners.You do NOT want to buy in an area where a lot of the owners are renting out their houses instead of living there themselves.Also check with your insurance agent for what the rating is for houses in that area.
