Upon my realtors advice, I'm planning to make an offer with $75000-100000 earnest money all contingencies waived, and offering early release to sweeten up the deal, on a 1 million home. What could go wrong specifically with the "early release of earnest money"? My feeling is that this money has to be given sooner or later anyways, since all contingencies waived. Would love to hear your experiences. Thanks in advance! #housing #seattle #mortgage
IMO, if you are 100% sure to buy the house, irrespective of anything, then maybe its ok. But(hypothetically speaking), if you realize a cracked foundation/you dont get the loan/you lose your job/family says no/for whatever trivial/nontrivial reason you want to back out, you risk losing all of the earnest money.
Great list of factors, thanks buddy! We've thought about most of them, and will recheck our backup plans again before offering. Getting pre-inspected, mortgage pre-approved, setting about $75000 rainy day aside.
Why are you doing a 7.5-10% deposit...? If you have any issues closing (e.g. financing or appraisal) you forfeit a higher amount of money If thereโs any issues you find during the inspection that can be extremely costly, then too bad as well. If this is an old house <1990s and hasnโt been gutted and remodeled, waiving all contingencies and fattening your deposit just basically assumes youโll buy it (or give up 100k aka half a downpay) of whatever problems come at you.
Thanks buddy! As much as I hate doing this, parts of Seattle have criminally low levels of inventory at this price point. We're not planning to offer free rent back, and potentially competing with all cash offers and Bay area defectors, so trying to sweeten up on other points. Getting pre-inspected, mortgage pre-approved, and waiving all contingencies. Wondering what are the other hidden factors we might be overlooking. It's not remodeled lately, but good point about this, and the gutting. Will check. House looks well maintained though.
Honestly though everyone does it.
I did it two months ago
Hope everything went well for you. Do you think no free rent back would be a deal breaker for sellers? Are buyers generally okay with it?
If home appraisal comes very low then pls be ready to pump-in more $$ from pocket to cover the gap, else in worst case situation your earnest money is gone โฆ good luck !
Thanks buddy! Yeah not planning to go a lot over comparable sales.
So I am not sure but isnโt your earnest money gone anyway since you are waiving all contingencies? Wont escrow automatically give the money to seller if deal falls through? Would love to know how people can get earnest back if deal falls through with offer that waives all contingencies
You're right - I felt the same that contingencies waived means the earnest money is gone sooner or later anyways.. so what harm could early release do. Let's see if a more enlightened soul knows better ๐
Not a good idea in terms of home appraisal; $75000 is NOT enough to cover appraisal difference. Mortgage preapproval does not mean very much at all, you need to make sure the offer price is in line with the homes that have already sold in the area. You can only compete with call cash buyers on price; it makes little difference what the Earnest money is. This is the unfortunate truth. If you want to be competitive, up your price, not the Earnest money. An extra 30k is nothing on a 1M home. ( just make sure it could still align with appraisal value) Also, be very CAREFUL about rent back. Do NOT recommend! Recently someone on Blind had the sellers not leaving the home, and he canโt do anything due to eviction memotorium .
I just read the same blind thread and decided no rent back ๐๐ Great points - thanks man!
Yeh dude, I feel you. Myself lost few bids to all cash buyers. But honestly there was nothing I could do, buyers want all cash, it is understandable. It gives security and guarantee. When you are the seller, you too will likely take the all cash offer if everything else is comparable. I feel like 30k to 50k is more reasonable for Ernest money lower the better. was told by multiple seller agents their client will take higher Price over all Cash, if there were no financial and inspection contingencies.
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OP is the buyer you clown.
Haha, Pinterest probably meant to say seller ๐