My Realtor is asking for $1,000 before we put a bid in on a house. The money is refundable should an agreement not be reached. I'm wondering if this upfront fee is a common practice? I
2007-06-12 01:00:06 · 5 answers · asked by mike_whittles 2 in Business & Finance ➔ Renting & Real Estate
Yes, it is called Earnest Money and it goes towards your down payment and closing costs. It is put into escrow with the real estate office of the company that has the home listed for sale. If your contract has any contingencies (like subject to financing) and you are unable to get financing the money is refunded to you. If you back out of the contract it will go to the seller because they took their home off the market on good faith that you want to purchase it.
2007-06-12 01:02:43 · answer #1 · answered by mrsfoster 2 · 3⤊ 0⤋
Yes, it is called Earnest Money and it goes towards your down payment and closing costs. It is put into escrow with the real estate office of the company that has the home listed for sale. If your contract has any contingencies (like subject to financing) and you are unable to get financing the money is refunded to you. If you back out of the contract it will go to the seller because they took their home off the market on good faith that you want to purchase it.
and if you do not have faith on the contracted party do not enter into the contract it is dangerous to you.
2007-06-12 08:08:39 · answer #2 · answered by Nandlal V 1 · 2⤊ 0⤋
It's called earnest money, and yes, it's 100% common and expected.
If the offer is declined, the check is never cashed. If it is accepted, it can still come back to you if you have an inspection contingency that you don't like the results of, for example (or sometimes if your financing falls through).
Once the offer is accepted, in most cases you can't get that money back unless you close.
2007-06-12 11:50:03 · answer #3 · answered by Yanswersmonitorsarenazis 5 · 0⤊ 0⤋
Your real estate broker is asking for 'earnest money'. Such a refundable deposit encourages sellers to take your offer more seriously, and offers the seller some compensation, in the event that you default or back out of the offer.
The practice is nearly universal.
2007-06-12 08:08:06 · answer #4 · answered by acermill 7 · 0⤊ 0⤋
Yes, it is called earnest money.Dont worry it is a very common pratice.
2007-06-12 08:11:37 · answer #5 · answered by Gin 3 · 0⤊ 0⤋