$59,000 Earnest Money on a Foreclosure..., why is the bank crazy?
Just put in the highest cash bid for a home under foreclosure. Bank accepted my price but wants my earnest money to go from 2% down to $59,000 down!!!! I wanted to close in 10 days, so the bank thinks their time is worth $59,000 if I decide to renig on my contract!?! in a whole whopping 10 days?!!!

Has anyone heard of something so crazy what kind of bank expects over a third in earnest money!

PROBABLY A MISTAKE, I AM GUESSING HERE...........5900, PERHAPS AN EXTRA ZERO. IS PURCHASE PRICE 590K?

I WOULD NOT PUT UP 59 K, NO WAY.

Did not mean to shout, I was in BPO type.

Also, EMD is not a fee to the bank for their time. At closing it is a credit to the buyer. They are just holding you true. I would be nervous about 59k. That would be a fight if it did not close. You might not get the money back.

purchase price is
$160,000.00

Verified over phone the amount of $59,000.00 EMD.

Banks are getting lazy too, they can't even make a written counter offer it was by phone via listing agent.

My father said the same thing, it would be a fight if it did not close.

All of our foreclosure banks want 10% down for cash, 3% for financed. I would have recommended that you counter back at 10% earnest money deposit. Time is on your side. There are a lot more foreclosures coming. It is also common that they counter via phone. They email us but we are not allowed to divulge their contact info so can not forward the email or it in on a web site that we can not give the customer or customer's agent access to.

Like Grampa said, counter back on the EM.

More Drama. I went there today with an inspector to make sure everything was good before agreeing to some super high earnest money and guess what, some people were in the house. I talked to them and the listing agent ALSO told them they were the highest bid and they probably got the deal. Not sure if their offer was Cash or a Loan financed. Listing agent told me that I was the highest offer on Friday at 2:30 pm. Are banks so desperate they need to get their listing agents to tell two different buyers they are both the highest bids? Sorry but this is so messed up. Now I really don't want to increase my earnest money with a bank that is so hungry for money it lies to people. There are more details, about agent supposedly telling other bidder they needed to increase their bid to beat the competition. Isn't this unethical? And why would listing agent only tell one bidder they needed to increase their bid instead of giving everyone the chance to increase their bid? Sorry if this is a rant.

I still find it hard to believe that a lender would require 59K down. Maybe if you were playing games and requested multiple extensions, they had backupp offers on hold.

If all you have stated is accurate, i'm be inclined to think that the Listing Agent is not actually taking the directions from the seller. Why would he/she act in such a way you are wondering? I Hace no idea as to the thought process behind it.

Who knows??

Sounds like the listing broker is trying to double end it and push your deal out. Until you have signed documents and go under contract by the bank in writing YOU HAVE NOTHING. In almost all bank addendums until they are signed by both parties the bank reserves the right to still look at other offers.

Ethics come into play if they are a REALTOR and has nothing to do with license laws or the state real estate commission.

By posting these comments you can tell you are new to purchasing REO. If you don't have a buyers broker now would be a good time to get one.

People think they can always do better on their own until they fall flat on their face.

I double ended an REO last year for almost 22k in commissions. The buyers said they hated buyer agents etc. and I said COME ON DOWN and I will help you write that offer!

what does double end it mean? They want to get the entire comission to themselves? If that is what you are suggesting that is not correct. The other buyer who was told they were also the highest bidder has a buying agent. I do NOT have a buyers agent so if the bank choose them over me the listing agent's comission would theoretically drop from the standard 6% to 3% if it is like most listing agreements.

I think I will require the bank to give me written counter offers form now on. I may be new to buying REO, but my father is an inspector and has bought many homes and has given me good advice so far and others have told me that getting a buyers agent this late in the game is a bad idea.

Should I confront this selling agent teling them that they are not being fair to the entire compitition by telling one seller how much they need to bid to beat the competition?!? I think doing that would just make her/him "forget" to submit my bid, etc.

Thanks for the reply, I appreciate your time.
Still curious,
what does double end it mean?

"my father is an inspector and has bought many homes and has given me good advice so far and others have told me that getting a buyers agent this late in the game is a bad idea."

If your father has all the answers you don't need us.

It seems like you have hit stumbling blocks and are getting nowhere.

No the listing contracts do not go from 6 to 3. Again do not know where you are getting this information. Generally REO's are assigned by asset management companies on behalf of banks and the AM companies take a 1 percent referral fee leaving them 5.0 if they got both sides.

If REO brokers only received 3 for doing both sides there would never be an incentive to market the property. Also by your logic if I was only getting 3 if it was me I would much rather deal with a buyers broker who is in the business and will make my life easier than someone I would have to handhold through the entire process for the same money.

This is why for sale by owners fail. At first they try to sell themselves and 90 percent of the time it doesn't work and when it does sell actual statistics are for a drop of 17 percent less than when sold through an agent. So if you take say 17 percent minus a 6 percent commission a FSBO is taking an 11 percent more hit to their bottom line and having to do all the work selling on their own.

The numbers and the reasoning do not make sense and never will.

So once that fails the FSBO tries to offer a commission to the buyers broker and save on the listing side. Once again this fails because a buyers broker does not want to make 3 percent and do the work of the seller on top of that. They would rather go to a listed property and have the listing agent handle their side of the deal. Eventually the FSBO wises up and lists and prices accordingly and it sells.

The point I am making is there is a lot of misinformation out there about what is accurate and what is not.

I think right now you are a headache for the listing broker and they want to deal with the buyer that is represented for a smoother transaction.

no legal advice-good luck

Double ending refers to the listing agent also bringing the buyer to the table. Then the agent is paid both the listing and buyers agent commission or "double" the usual listing comission. Actually in REO properties the buyer's commission is typically higher that the listing agents commission so it's a net of more than double the $.
REO transactions are very different from typical sales. I actually have not ever had a bank consider an offer from someone not represented by a realtor.
The issues you are describing are very typical in these transactions. The bank addenum contracts typically states they reserve the right to consider other offers. You have not accepted their offer at this time and they are legit in entertaining other offers.
You need a realor who understands REO transactions. You are way over you head. When this deal falls through, take some time to find a Realtor experienced in REO's and they will assist you in locating the best property and successfully executing a contract.

"I think right now you are a headache for the listing broker and they want to deal with the buyer that is represented for a smoother transaction."

Seriously, how can you make such a broad generalization? I've spent a max of 15 minutes on the phone with this listing agent and sent her maybe 4 emails max. If what STEW says is true about double ending than any selling agent would gladly deal with 4 emails and 15 minutes on the phone to make thousands of extra of dollars.

Sorry "super realator", but your logic/comment doesn't make sense.

I think Super was perhaps insinuating you raised a red flag with the Listing agent as being a pain in th batoosie. List agent decided to take the path of lesser resistance.