Today I showed a foreclosure, my buyer likes it but when I explained the procedures and the deposit that goes into escrow she said that another realtor had told her she did not have to put a deposit on her offer. She wants to continue looking and in case she finds something else she does not want to loose her deposit. This is the first foreclosure that I show. I don't understand why they would tell her that she does not have to put a deposit.

Becuase that agent knows nothing....I received a offer today with a earnest money of 75.00...After my assistant and I stopped laughing I had to call and ask the agent if it was a joke and nope her buyer doesn't want much money tied up in case it doesn't work out..whatever..you need a deposit and usually 1% of the price is what I tell everyone,but 1,000 is what all of the banks want if not more..You dont look very stable or have a good offer with 75.00 down..

Yes, that is what I asked her for $1000, I explained that they have to see that she means business. There are two other offers already. How can you even put in paper zero deposit. I had a short sale that my buyer cancelled the offer because they took too long & it was no problem. You can always cancel an offer on a foreclosure as long as it has not been accepted?

In all honesty you should consult your broker before writing an offer. These questions are real estate 101. Im not trying to be mean, but the last thing you want is a lawsuit.

If it were my buyers I would tell them to take a hike if they don't understand the whole deposit thing. Tell them it's at least $1,000 or go work with someone else.

I heard that you can most always get your deposit back on foreclosures. I think buyers should expect certain differences when they're dealing with a REO. I sent over the bank's addendum to a buyer's agent because they wanted to write an offer. He emailed me back and said he couldn't believe what was written in the addendum and was going to advise his buyers to move on to another home. I guess they should not be looking at foreclosures then?

Some people are unprepared for the financial realities of homebuying and the subsequent homeownership and it sounds like your client may be one of them.

Honestly, it sounds like she will have a difficult time making a commitment to any one particular house if she has stated that she wants to keep looking once she is under contract. And she has apparently been talking to other realtors as well.

This sounds to me like one of those people who will make you waste your time showing her lots of houses and then either decide not to buy or go use another realtor. Don't spend a lot of your time on her -- there are other buyers out there.

First of all, every state has its own laws. In some places an earnest money deposit is not required. Of course the offer won't look as strong when you don't have a large EMD, but escrow can still be opened without it in many places.

REO properties and regular sales makes no difference with the EMD. It is all subjective to everything else in the offer.

Heck, that is not much more than we charge to process a RENTAL application.

There are some people getting some BAD advice out there!

EMD is area specific. It is not unusual here to see offers with no or very small deposits. Not that my REO clients will take them, but I've written many offers with EMD of less than $500 and I don't remember any of them being asked for more.

I have been getting offers on my banked owned listings from those who took a real-estate-riches program for $7,500.

The earnest money is $250 and they have successors and assigns on the contract with a long closing.

The idea is to assign the contract to another at a higher price.

The buyer's agents are burning up $3.60/gal gas to submit these lowball offers with no success.

Thanks for all your info. I will meet w/my manager today & get the specifics. This buyer seems to be all over the place. At first she said she wanted a single family, now she is looking at condo's to take advantage of the deals. She is pre-approved for high $300's but seems confused of what she wants. Now that short sales & foreclosures have taken over my area I need to learn all I can if I want to stay afloat. There are a lot of buyers out there looking for deals but they don't have a clue how the process works.

The buyers perception is there is blood in the water which there is right now. The banks that are being aggressive are selling-the ones holding on to the fairy dreams of 2 years ago are sitting and rotting away to take a massive hit down the road when they come to reality.


I don't know why everyone gets worked up EM and timelines. If the bank wants a big em check from me they will pay for it in alot lower price. If they think they can get a big deposit AND market price out of me I will go to the other thousands of reo's out there to get what I want.

All you have to do is put em UPON ACCEPTANCE in the contract. That way knowone is holding earnest money until the offer is accepted. You also put a short timeframe for acceptance like 1 to 2 days that way if the timeframe expires you can accept as the buyer but are not required to.

That's why is so important that we Realtors educate ourselves, peers, and public. I just received multiple offers on my second REO deal, and most of the agents that wrote those purchase contracts believe they are dealing with 100% financing as in the past. One even wrote "pending of acceptace" in the EMD section of the contract, most of them call me and said can you push the bank buyer is really interested in the property they are FHA approved. Can you imagine if the agents out there don't know what are they doing! the public is messed up.