Hi Sdamenon,

That's one of many points of contention with short sales. They aren't consistent in their procedures. Some banks will require you to open escrow with earnest money upon acceptance by the seller's (not the bank) and some don't require it until they, the lender accepts the offer. I've encountered both situations. It's frustrating when they require the earnest deposit because they will not submit the offer until escrow is opened. But, like stated below, until the offer is accepted by the lender, and throughout the 10 day inspection period, you always have the right to cancel the contract.

Hope that helps.

Wed Apr 9 2008, 10:35

Sdamenon-

Just to be clear, your buyer's agent should have in his/her possession your check for the earnest money deposit. In the standard short sale addendum, the check is not to be deposited until the bank has sent over a short sale agreement, at which time it is to be immediately deposited.

Mon Apr 7 2008, 12:30

It will be necessary to give an earnest deposit. On a short sale- the check is not deposited into the escrow account until the offer is accepted-which can be a significant amount of time- if you change your mind prior to the acceptance of the offer- you can withdraw your offer. At the time the offer is accepted- you will still have 10 days for your inspection period-if you find something during the inspection period that is not acceptable you can cancel the contract.
With REO/bank owed properties- the seller will require additional addendums - you need to read very carefully - as they may make the earnst non-refundable after the inspection period. Also with REO properties- some of the homes have been stripped of appliances, lighting etc. If during the appraisal the appraiser deems the properite "unlivable" in the current state- you lender may not approve the loan and your deposit could be at risk. Many REO's are requiring earnest deposits to become non-refundable after 15 days.

Mon Apr 7 2008, 11:31

Hi Sdamenon,

You will want to give an earnest money check with the offer. The check is not deposited until the offer is accepted by the seller. At that point the contract is in force and it should specify the terms of getting your earnest money refunded.

Hope this helps...

~Sal

Mon Apr 7 2008, 11:25