Foreclosure in Scottsdale>Question Details

Jane Seymour, Home Buyer in Tempe, AZ

Short sales and earnest money questions.

Asked by Jane Seymour, Tempe, AZ Fri Apr 16, 2010

Just found out I've moved from second to first in line for a short sale bid. The realtor asked for an earnest money check, among other things, to move things along. I asked why the first deal fell through and she said she wasn't sure but the bidders went through inspection and found termites on a shed out back which is connected to the house. However, she did not know why the deal fell through and she also said it is not atypical for homes in AZ to have termites.

Should she have talked to the listing agent to find out why and what else turned up in the inspection before asking for the earnest money or am I obligated regardless to send it beforehand? Few questions - If I proceed, should I have a second inspection done? And what happens to the earnest money during a short sale? For example, did the first bidders forfeit theirs when they walked after inspection? And are listing agents required to dislose information regarding the inspection or is this just a courtesy? Th

Help the community by answering this question:

Answers

5
Buyers agents don't always get disclosed why a previous buyer walked. Some buyers don't understand termites are treatable and it scares them off, hard to say. A listing agent, if they have knowledge (imputed) of conditions they should disclose. However, a buyers has due diligence period in which they should get their inspections completed (10 days typical in AZ contract) and if there is an issue during that time you can exit the contract and receive your earnest deposit back.

If your contract calls for you to perform as described above then move forward or you may cancel and lose nothing. It is a conversation with your Realtor and read your contract yourself as well, don't leave it up to being told what it says know it as well.

Best of luck
Laura Myers
480-600-6213
0 votes Thank Flag Link Tue Oct 26, 2010
Jane,
You need to consult with your Realtor and read your contract, know what you signed and if you have questions ask your agent that is what they are there for is to answer your questions and represent your best interests.

Now with that out of the way...The listing agent could as a courtesy, if they have it offer you a copy of the home inspection, but there is a chance that they don't have it. Your agent can ask. As for earnest money, again it depends on your contract and how it is written if you need to front it now. Typically once the contract is signed by all parites and the bank has approved the short sale price, yes you would deposit your earnest money and then proceed with your own inspections, always always, always get your own inspection. Your agent can help you to find a reliable inspector.

As for your earnest money again this is dependent on your contract and how it is written, is the earnest money non-refundable? Are you buying the home as-is? etc...there are so many what ifs that only your Realtor who wrote the contract can truly answer your questions.

Good luck I hope it works out for you...always read what you are signing and know what it means ask for further explanations on things you don't understand. Consult a termite company for questions on the termites.
0 votes Thank Flag Link Sat Apr 17, 2010
You need to confer with your buyers agent determine how your sales offer is executed on return of earnest money

YES always get your own inspection

Termites... based on the condition would not turn me off on a home, they can be treated however if there is damage to property and etc. I would reconsider BUT unknown till your determine that.

Listing agent can't disclose any information on a property UNLESS they have knowledge. Unknown what the listing agent does or does not know

If you like the home pursue it... if you don't keep looking
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Apr 17, 2010
As long as you have an inspection contingency on your offer and you meet the timelines specified for inspection your earnest money should not be at risk. If I were the buyer I'd have a quality inspector that I've hired do the inspection for me. Homes are a big investment and you want to know what issues you may be buying.
0 votes Thank Flag Link Sat Apr 17, 2010
Your agent and or attorney should be advising you on all these issues and explain the contract, contingencies, escrow money, etc.--If you decide to proceed, yes do have your own inspection, it could turn out to be the best money ever spent. As far as escrow money, it will depend on what was agreed to in the contract, again ask your agent and or attorney for specifics--as far as disclosures, yes any known defect(s) should be disclosed--again your best source of information is your agent and or attorney.
0 votes Thank Flag Link Sat Apr 17, 2010
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2015 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer