do i have to give earnest money on a contract?

Asked by Pinesfinest1, 33331 Fri Sep 7, 2012

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Maggie Hawk, Agent, New Smyrna Beach, FL
Fri Sep 7, 2012
BEST ANSWER
Pines,
If you're asking whether you need to give an earnest money deposit at the time you make your offer, the answer is "No."

Now, I'm not saying that it wouldn't be advisable to provide an earnest money deposit at some later point. But there are some legitimate reasons for waiting a bit.

1. You might want to make a substantial deposit to show that you're serious, but you don't want to transfer large sums of money before you know that your offer is accepted. You can write into the offer that you'll make a deposit of (whatever amount) within 3 days, or 5 days, or 7 days of acceptance.

2. Sometimes a Buyer is purchasing for cash, and wants to close in a week or so. Here in Florida, where so many of our Buyers are from another state or another country, that would probably not be enough time for the Buyer's check to clear, and could actually delay the closing.

3. Since an offer on a short sale could take months to get approved by the Seller's lender, it wouldn't make sense to tie up a deposit any sooner than necessary.

4. If you're buying a foreclosure, the Seller may dictate when and how the deposit should be made, and the amount, so you may need to wait until acceptance to provide the required funds, and provide them in the proper form.

There are other reasons, but you get the idea--You'll likely want to show good faith with an earnest money deposit, but not necessarily right away.

Good luck with your purchase.
2 votes
Thank you for explaining your reply. You definetly make alot of sense.
Flag Sat Sep 8, 2012
Roland Vinya…, Agent, Sprakers, NY
Fri Sep 7, 2012
There is no legal requirement to do so. However, without some skin in the game, sellers may not be willing to accept your offer. Earnest money demonstrates a couple of things: 1) That you do have some money and substance. Someone without money down may be perceived as someone who can't get the money to close. 2) That you are serious about your offer and are willing to risk some money to prove that you are.
5 votes
Carmela Harb…, Agent, Medford, OR
Fri Mar 10, 2017
No Earnest Money, No skin in the game!

Good Luck with that!

Wrong Market, wait till the bottom falls and everyone is desperate to sell to anyone willing to make an offer. Even than you would want something to assure you that a buyer has something to loose if they string you out and don't perform on their contractual obligations.

Cammy Harboldt - RE/MAX Integrity - Grants Pass Oregon - 541-761-9552
1 vote
Ron Thomas, Agent, Fresno, CA
Fri Sep 7, 2012
Why do you ask: Aren't you EARNEST?

Yes, I believe that everone requires a Good Faith Deposit to ensure that the Buyer has something to lose if they back out of the deal.

The amount varies greatly; check with you Realtor.
1 vote
Mack McCoy, Agent, Seattle, WA
Sat Sep 8, 2012
Joan, is that true that in Florida a buyer is required to deliver earnest money?
0 votes
Marsha Umans…, Agent, Tamarac, FL
Sat Sep 8, 2012
Earnest money deposit shows the seller that you are really interested and serious about ourchasing. Who would you deal with if you were a Seller, a potential buyer who leaves a deposit, or the one who does not?
Best of luck.
0 votes
Terry McCarl…, Agent, Cape Coral, FL
Fri Sep 7, 2012
Is the property a short sale? If so we use a short sale addendum here in Florida and depending on how that form is filled out determines when the earnest money must be placed.
0 votes
Joan Tole, Agent, Fort Lauderdale, FL
Fri Sep 7, 2012
if there is no money on deposit you do not have a legal contract. think about that. the seller could legally sign another offer
0 votes
Joan Tole, Agent, Fort Lauderdale, FL
Fri Sep 7, 2012
if there is no money on deposit you do not have a legal contract. think about that. the seller could legally sign another offer
0 votes
Barbara East…, Agent, Pompano Beach, FL
Fri Sep 7, 2012
As a seller would you consider accepting an offer if the buyer was not putting any money down? absolutely not! Listen to you Realtors advice - they are the experts.
0 votes
Meir Aloni, Agent, Plantation, FL
Fri Sep 7, 2012
Only if you want your offer to be taken seriously....
Which issue/s do you have to deposit it with your offer? Are you planning to take the Shotgun approach and make many offers, with no $$$ in escrow??
0 votes
Meir Aloni, Agent, Plantation, FL
Fri Sep 7, 2012
Only if you want your offer to be taken seriously....
Which issue/s do you have to deposit it with your offer? Are you planning to take the Shotgun approach and make many offers, with no $$$ in escrow??
0 votes
David McChes…, Agent, Pembroke Pines, FL
Fri Sep 7, 2012
The Answer is No. 2. Legally no. It can also be something of a good value. Rolands answer is the one. Why would you not do it. If you really want to buy you do it or you will not even be considered by the Seller.
0 votes
Marge Bennett, Agent, Fort Myers, FL
Fri Sep 7, 2012
The FARBAR contract allows for the deposit to be paid so many days after the seller accepts. This is especially helpful when the buyer is out of town and the offer is made via email. This also allows the escrow to be initially placed with the title company who will be handling the closing.
0 votes
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