Is It Legal?
I understand that it is a comon practice for real estate agents to ask for a deposit when making an offer.
Is it legal for them NOT to except an offer if I do not wish to pay a deposit?
I understand that it is a comon practice for real estate agents to ask for a deposit when making an offer.
Is it legal for them NOT to except an offer if I do not wish to pay a deposit?
If by deposit you mean eanest money....
depends on state laws... most require financial consideration... so the amount is what varies...if you are worried about wrapping up money ... write a check for $10 earnest money...
The real estate agent wants a deposit to put an offer in, something to asure them that I am serious and will get financing.
I even presented her with a pre-quilifing letter from the mortagae company that I am working with and she is still asking for a deposit!
It's thought that the size of your deposit that accompanies the Offer reflects upon your Offer's credibility. You should always include an initial deposit of at least $100 with the promise to make additional deposits as the transaction progressess.
Contrary to popular opinion, but only under specific circumstances, a real estate broker, or a brokers' agent is not dutibound to present all offers to the Seller... and I believe this to be a uniform standard by those states that regulate and license real estate brokers.
If the Seller specifically directs the broker, or broker's agent NOT to waste their time with lowball offers, or offers that do not meet certain criteria... for example, in insufficient deposit, or an offer seeking Seller concessions, or if an offer isn't in writing... the broker or brokers' agent isn't obliged to present that offer to the Seller.
Some would argue that it's in the best interest of the Broker to present all offers....but not if the offer is unconventional, embarrasing, or fails to meet the Seller's criteria for an offer.
Our suggestion is to find another realtor (buyers agent) to deal with the seller’s realtor. Maybe one evening you could stop by the home see the owner and tell them the details of your difficulty. This may help.
Eric & Rosa
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The Realtor is the agent of the seller. He is bound to abide by his principles wishes. If he is told to only present offers above a certain price, or only with an earnest money deposit, then that is what he must do.
Regading offers with earnest money deposits. I NEVER include any money WITH the offer. My offers include an offer of an earnest money deposit "with in 72 hours of execution of contract". This allows me to make many offers and not go throught the hassle of getting my deposits back from brokers for non executed contracts.
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Laws vary in different states, but in the states I have practiced in:
1. A deposit / earnest money is NOT required. It is desried, and agents may squawk without it, but it is not required. It is standard practice to make some sort of deposti, and you may want to do so just to get along and not upset the apple cart. You may make it payable upon acceptance of offer.
(SEE my recent article about CONTRACTS)
2. An agent must present all offers. I have known many that do not. While one could say the seller instructed them not to present low ball offfers, I have never known a seller to do so. Most sellers want and deserve to look at all offers, no matter how ridiculous they are.
RE Agency law I'm familiar with, requires agent to present ALL offers, whether she likes them or not...and if any agent ever gives me problem over this, I go directly to the Broker.
Broker owns that listing...NOT the agent...and broker also knows it's his and his agents' obligation to pass along all offers. Since I can quote chapter and verse of my RE Agency law, I normally am better armed than the agent or broker.
Any agent or broker who does not present all offers is probably in violation of his state's RE Regs & commission rules, so a complaint to that RE Commission might bear fruit.
It's quite common to have the P&S Agreement include NO earnest money, so this is an everyday matter.
I really don't understand why you don't want to give your real estate agent earnest money. By law, you are not required to do so, but if you don't, nobody will take your offer seriously. You can always have contingency clause in the offer or contract saying that if you cannot get financing for any reasons, home inspection reveals serious deficiencies in the house, find evidence of termite damage, or any other reasons that you want, you CAN get earnet money back. Agents usually ask for $1000, but I always insist to give them $500. The earnet money will go towards your downpayemnt or closing cost at the closing.
Anyone and his mother can get a prequal letter. They don't really stand for much. It means that someone pulled your credit, though has not verified anything. The verification usually comes after you have an accepted offer in hand.
The reason why the seller likes to see a lot of earnest money, it shows that you do expect to close.
earnest money is not necessary and an agent has to present all offers .
i have never seen sellers give explicit instructions to an agent to not accept an offer to present them if there is no deposit. but remember if you are not the only offer, who do you think the sellers are more likely to go with especially if they are motivated to sell.
you'd answer the highest offer, but i'd say not necessarily, they will go with an offer that it is most likely to close. ...and if the agent you are working with in this particular situation expects earnest money, he may convince the seller to not sell to you because they may sense difficulty in working w you towards getting a signed contract. so play nice give the $100 refundable deposit, make it easy on yourself to get the house especially if are going to get a good deal.[ Edited by lp1 on Date 10/12/2003 ]
I've seen it recommended by one guru to write a check for the earnest money deposit but have it payable to both the seller and your closing agent. That way, they can't cash it but they still know you're pretty serious.
Anyone do this?
Hi Erick, I have not heard of that, but that may be a good idea.
Northeast - if the agent that you are referring to is both the sellers agent and the agent that you are using to place a contract on the property, this is a sticky situation for the agent.
In my state, Realtors must present all offers. In your situation, the realtor would be working as a "Dual Agent", which is suppose to represent the best interest for both parties. It doesnt appear like that is happening here! If the agent is considering whether or not they are going to present an offer, the agent is walking an extremely fine line. Another Realtor should certainly be representing you in this kind of situation, both now and in the future!
There has been a lot of great post about this!
BAMZ