Do i have to make a deposit in a home when i make an offer and if so could i lose the the deposit if someone else get the house?

Asked by gongolady, Venice, FL Thu Aug 23, 2012

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12
Annette Law…, Agent, Palm Harbor, FL
Fri Dec 27, 2013
This question was asked in Aug 2012. Go Lady has likely moved on.

There are overwhelmingly more protections in place for the buyer than for the seller. A buyer can exit a contract practically on a whim or as most contracts state. "At buyers sole discretion" leaving the seller with nothing but dust and an aged listing plus residual damage incurred due to disclosure requirement all because they trusted the buyer.
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Imagine if you would, that a buyer could submit an offer on homes without a deposit. The buyer knows they can exit a contract on a whim. What prevents them (buyers) from papering the local market with offers knowing they will only buy the one that accepts a 'after offer' price beat down? A trail of ruins in left in the wake of such buyers that the seller inherits.
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The presence of a monetary offer, as meager as the deposit is, suggests the buyer is not papering the market and could become a challenge for the buyer to write checks for multiple deposits. (THOSE CHECKS WILL BE CASHED) from their cash reserves.
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The answer to your next questions are NO and NO!
If the home inspection finds flaws and the owner chooses not to fix...You do not get your inspection fee refunded.
If the fiat appraisal comes in below the negotiated price and the seller does not lower the price to match, you do not get your appraisal fee back.

Best of success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727.420.4041
http://FirstLookHomes.com
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My NC Homes…, Agent, Chapel Hill, NC
Fri Dec 27, 2013
You haven't given enough specific information, but generally speaking you are required to make a deposit once an offer is accepted and you have a contract. If you're looking at foreclosures you need to either speak with your buyer broker and find out all the requirements or if you're bidding online you need to red through all the requirements.

If you are looking at a foreclosures, be aware that rarely are they the deals that buyers presume them to be and I would advise reading the link below before doing anything else.
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Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Fri Dec 27, 2013
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Melissa Hall below gave you a good answer.

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Melissa Hall, Agent, Brandon, FL
Thu Dec 26, 2013
It is expected that you would make an ernest money deposit when you write a standard offer. By standard I mean any normal home purchase (not a bank owned or short sale). The amount would depend on the transaction. With the competitive market we are in, a higher deposit would give you a leg up over the competition. However, I was able to negotiate a very low deposit for a retired couple that was using VA financing and even beat the competition on that one.

You can accomplish a lot with a good agent.

If the seller accepts another offer over yours, you would not lose the deposit, because your check should never be cashed until your offer is accepted.

You would typically have a home inspection contingency, appraisal contingency and/or a financing contingency. If there were any issues as stipulated in the contingency clause(s) of the contact, you would be entitled to get your full deposit back.

I hope this answers your questions.

If you have additional questions, feel free to contact me at 813-708-9268 or callmelissahall@gmail.com.
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Dwight A. Mc…, Agent, Brandon, FL
Mon Sep 17, 2012
It depends. If it's a short sale, don't tie up your money for 3 to 6 months. If it's an REO Submit what they ask for, because they will be looking primarily at the type financing you are using. It it's a regular sale, give a preapproval letter and 1% of the purchase price.

Dwight A. McDonald PA
Broker, Realtor® CDPE,ABR,CPMS
CDPE-Certified Distressed Property Expert
ABR-Accredited Buyer Representative
CPMS-Certified Property Management Specialist
Certified Fannie Mae CreditSmart® Trainer
International Realty Plus-Tampa Bay
1313 Providence Road
Brandon, FL 33511-4885
Phone (813) 629-6954
Fax (813) 569-1772
http://www.irptampabay.com
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Brandon John…, Agent, Brandon, FL
Thu Aug 23, 2012
You "should" make a deposit to show you are serious. Typically you have aprox 10 days of your inspection period to inspect the home. If you decide not to move forward with the sale, I request that you receive your full deposit back. You do not loose your deposit if someone else buys the home.
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Alma Kee, Agent, Tampa, FL
Thu Aug 23, 2012
Your realtor can help you with your questions. It depends...on a bank owned or regular sale then once you have a contract you MUST put up a deposit. Then your contract will say whether or not your deposit is refundable if you cancel before your inspection period ends. Again your Realtor can go over the details with you.
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Stephen McRo…, Mortgage Broker Or Lender, Tampa, FL
Thu Aug 23, 2012
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If you want to separate yourself from the rest of the pack to get your offer noticed, you should put up a substantial amount in Good Faith Money in escrow!

I'm not talking about a $1,000 deposit either as everyone seems to try that weak approach! You need to turn heads with your offer, shake up the apple cart and get your offer noticed!

Just writing the deposit amount on the offer is weak! It's a mental thing with sellers, show them the money!

Do as I say and you'll do well!

1. Obtain a Pre Approval Letter

2. Obtain an Escrow Letter after depositing at least 3% of the the price range homes you want in a Title Company's Escrow Account.

DO NOT listen to any realtors who take short cuts and/or tell you that it's not required you do it this way!

This way works best!
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And there are a number of realtors that lie to buyers, trying to get them to put large deposits down when its not necessary. I've had 2 different realtors try and get me to put down over 25% for a deposit. And then try and convince me to go even higher. Most realtors aren't working for the buyer and buyers need to remember they are running the show.
Flag Wed Sep 6, 2017
Shanna Rogers, Agent, Murrieta, CA
Thu Aug 23, 2012
Hi gondolady,

No, you don't HAVE to make an ernest money deposit when you submit an offer. However, most people do because it shows the seller you are serious about your offer. (It may be 1%-3% of purchase price). The seller's agent/escrow/title isn't supposed to cash the check until your offer is accepted (in writing) by the seller. There are usually contingencies in the purchase contract and as long as those aren't removed (in writing) and you decide to cancel contract for allowable reasons (stated in purchase contract) you should get your ernest money deposit back.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes
Patrick Fiel…, Agent, Plano, TX
Thu Aug 23, 2012
Hi Venice, Florida,

When you ask your agent to write an offer on a house, the offer will state an amount that you will put in earnest (deposit / good faith funds) with a title company. However, you don't actually pay that amount until the offer is accepted (signed or executed by you and the seller.) At this point, no other offer could be accepted by the seller and your eanest / deposit funds would not be at risk. The funds are not paid to the seller directly, so even if the seller was in breach of contract by refusing to sell you the house after they contractually agreed to. The Title company would have the funds and serves as a mutual third party to the transaction.

There are many factors that could effect how the pre-paid funds are disbursed if a transaction ultimately fails, but your questions is limited to only the offer stage, so in this early stage, there is no risk that the seller could retain your funds nor would the funds ever be in the seller's possession until after the sale has closed.

Once you choose a local agent to represent you in the purchase, he/she will address these issues for you, and in your best interest.
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Don Tepper, Agent, Burke, VA
Thu Aug 23, 2012
Yes.

No.

Technically, you don't HAVE to make a deposit--earnest money--when making an offer. However, your offer generally won't be taken seriously unless you do. The amount will vary depending on: (1) purchase price of the house, and (2) local customs. In some places, it's sometimes generally a flat amount, like $1,000 or $2,000. Other times, it may be a percentage of the value of the house--such as 1/2% - 1% of what you're offering. Your Realtor can advise you.

If someone else makes a better offer and the seller accepts the better offer: No, you won't lose your deposit. You CAN lose your deposit, though, if: (1) You make an offer, (2) The offer is accepted, and (3) You fail to comply with the terms of the offer. For example, you offer $100,000 and accompany it with a $1,000 earnest money deposit. The offer is accepted. Then you change your mind and decide that you've paid too much, or you don't want to move. Or the contract requires you to apply for financing within 7 days, and you don't do that. In those cases, your deposit would be at risk. Again, your Realtor can advise you.

Hope that helps.
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What if something is wroung with the house and you backof afther inspection?
Flag Thu Aug 23, 2012
Tim Moore, Agent, Kitty Hawk, NC
Thu Aug 23, 2012
I don't think you have to, but it would be better if you did. The laws there could be different than here in NC, here we have 5 days after the offer becomes a contract to deposit any earnest money being offered by the buyer. That is often 1-3% of the purchase price and it will go towards the money required as a down payment at the closing. If you fail to get a loan, or cancel the contract because of issues with the inspection or any number of other permitted reasons, you would get it back. If you defaulted and backed out without being able to, under the conditions of the contract, you could forfeit the money. It would not be deposited until there is a contract and that would require all parties to agree and sing the offer. At this point no one else could buy the house unless you backed out.
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