Earnest Money Deposit's - Are They The Norm Everywhere?

By
Real Estate Agent with Long & Foster Real Estate Companies- Fredericksburg/Spotsylvania

I recently got a call from an agent who indicated that she was about to present an offer on one of my properties. We had quite a nice conversation, and we reviewed, while on the phone, what I assumed were most or all of the pertinent details of the offer.

Shortly thereafter, I got the offer via fax. As I reviewed it, I was a little surprised when I got to the part about the "Earnest Money Deposit." It was blank. Ok - oversight. No big deal. I call the agent, and get the explanation. The client, who is approved for 100% financing, feels that no earnest money deposit is necessary. I explained to the agent that while I found this a little unusual, I would of course be presenting the offer to the seller immediately.

Ok, I understand. Clients think stuff. And technically, earnest money is not "required.". In my area, it is just normally done.

How about in other areas? Is an Earnest Money Deposit" the expected norm?

 

Kevin McGrath

The Wallace & McGrath Team 

Coldwell Banker Elite - Fredericksburg

"Selling Homes In The Fredericksburg Virginia Area"

www.fredva.com

 

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the umbrella to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Location:
Virginia
Groups:
Active Rain Newbies
Realtors®
Blogging & SEO
The Art Of Marketing You
Out Of The Box!
Tags:
fredericksburg virginia real estate
homes for sale in fredericksburg virginia
earnest money deposit

Comments 37 New Comment

Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the scissors to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
128,789
Kevin McGrath
Long & Foster Real Estate Companies
Long & Foster Real Estate Companies- Fredericksburg/Spotsylvania

Each state is different. In Virginia, what you are describing is not the norm.

May 07, 2009 05:42 AM
Anonymous #34
Anonymous
Jamie

As has been stated a few times here, the issue is whether there is recourse for the seller should the buyer walk away from a contract that included no earnest money -- and the answer is probably "it depends on the judge."

Offering 1% can be a lot of money.  For a buyer who's using a VA mortgage with no downpayment and asking for seller assistance with closing, coming up with that much cash can be really hard.  Putting something down, though, seems prudent.  I'd say that $1000 tells the seller the buyer is serious.

February 08, 2010 01:16 PM
Anonymous #35
Anonymous
Matthew Ryan

Wow, How many of you are attorneys? I stumbled upon this thread because I wanted to find an answer to this exact question. Is EMD necessary for a legitimate contract? A contract to purchase a home is not the only contract that we as realtors or real estate professionals use. Almost every day we use contracts with no EMD or escrow value of any kind. A listing agreement is a binding contract. A buyer agency agreement is a binding contract. I defy anyone to find were it is necessary to have an EMD in either of those contracts. After reading this thread I have decided to call my attorney and ask his opinion. I guess the internet is not the best place to find these kinds of answers. I personally think that Lou is correct and that consideration is the end product of the transfer and not a valuable consideration held by a third party at all. Thank you Kevin for bringing up this question. I am also a Realtor in Virginia.  

March 11, 2010 08:43 AM
Anonymous #36
Anonymous
Lou (again)

To go back to the original question. Yes, it is the expected norm but no, it is not required.

March 11, 2010 08:55 AM
Anonymous #37
Anonymous
JoBeth

Most of your protracted "contractual" verbage is meaningless today.  No wonder Realtor's are starving.

If a buyer has an Underwriter's Preapproval in hand for a 103% Rural Development HUD loan, there is no earthly reason why a bank sitting on a house wouldn't accept an offer without a deposit, knowing full well that the buyers are qualified to pay the mortgage and qualify as low income candidates for this particular loan type.

The one percent helps the buyer's bank account far more than application against their mortgage amount, which is zero! 

Most of these comments were spoken like true Real Estate Sharks. 

 

October 11, 2010 01:48 PM
Anonymous
Post a Comment
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the key to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Rainmaker
128,789

Kevin McGrath

Long & Foster Real Estate Companies
Ask me a question
*
*
*
Spam prevention

Accessibility option: listen to a question and answer it!

To submit the form,
drag the balloons to the circle on the side.

Type below the answer to what you hear. Numbers or words, lowercase:

Additional Information

Homes, Real Estate, & Foreclosures For Sale In Fredericksburg Virginia & Surrounding Areas