Agent2Agent in New Jersey>Question Details

Andrew Tisel…, Real Estate Pro in 07024

Who still takes the $1000 or more for the initial good faith deposit and why?

Asked by Andrew Tisellano, Broker/Assoc, 07024 Thu Jul 18, 2013

For a little over a year now I put zero for the initial deposit.
I feel there is no reason for it. Has anyone ever lost this good faith deposit? how could they if you have not gone thru the 3 day attorney review period and officially under contract.
I can see maybe in south jersey where they do not use an attorney maybe.
But when there are attorneys involved the 2nd deposit is the one that matters.
I have had some resistance with some listing agents and try to appease them.
But the hassle if the deal falls thru to get the check back to the buyer or it does go thru to get the check to one of the attorneys is more work that we need to do. We could be spending that time helping other clients.
I know some people say it is not a contract if no money exchanged, but I have closed over 20 deals and 20 more under contract with no problems to close. I've done types of deals too residential, commercial, short sale, bank owned, estate, traditional sale.
What do you think?

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Answers

8
Terry Bell’s answer
Well, this would not fly in California! I wouldn't consider it a serious offer. Frankly, I can't believe that with all the fabulous real estate in Jersey that anyone would take their house off the active market without a large deposit!
0 votes Thank Flag Link Sun Jul 21, 2013
Why not take it? It's called "skin in the game". It also discourages running around making shotgun offers, especially on short sales. It just keeps things formalized and organized. However do what works for you. I like it and will keep making it a requirement for my deals. I even have buyers make it $5,000 or $10,000 to show that they are serious when multiple offers are in play. Nothing says "serious" like good old fashioned cash.
1 vote Thank Flag Link Fri Jul 19, 2013
I have not collected a binder in years. This was a process that but agents at risk if the money did not get into escrow in a timely manner.

A binder is not an indication that the potential buyer can afford the house. (Unnecessary process),
1 vote Thank Flag Link Thu Jul 18, 2013
Hi Andrew,

I agree but if you are the seller and you have two offers identical with the exception of the EMD which one are you taking?
0 votes Thank Flag Link Sat Jul 20, 2013
The initial/good faith deposit is required in most states to provide the "consideration" component of a legal contract. As we remember from middle school, for a contract to be legal there must be offer, acceptance and consideration. A minimum amount of consideration is required at the time the contract is entered into - the total purchase price paid at close of escrow doesn't count.
2nd, 3rd and non-refundable deposits are negotiating tools that I use all the time for all property types.
0 votes Thank Flag Link Sat Jul 20, 2013
Andrew, I don't know of any other REALTOR® who routinely uses zero for the original deposit. The initial good faith deposit is one of the things that an owner considers when an offer come in. Yes, price, credit worthiness, closing date flexibility etc. may be more important, but how many owners are willing to even accept an offer with ZERO up-front financial commitment? Not many in this part of the state!

Leonard “Len” Dunikoski, GRI
REALTOR® Associate
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760

(732) 239-0739 (cell) (732) 530-6686 (office)

ldunikoski@dianeturton.com

http://www.rumsonfairhavenhome.com
0 votes Thank Flag Link Sat Jul 20, 2013
I believe having skin in the game helps to strengthen the deal not just for the Buyer but for the Seller. If I were the Seller I would always choose the contract with a show of good faith over the one without.
0 votes Thank Flag Link Fri Jul 19, 2013
A deposit always has and always will show a level of commitment and plays an important roll in negotiations. Witch deal would you advise your client to accept if you had 2 at the same price and one had a deposit and the other didn't. Not getting a deposit to me is a lack of service to a client not to have to one form to get it back. Work on negotiation skills and include a deposit in them:)
0 votes Thank Flag Link Fri Jul 19, 2013
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