Protection Against Flaky Buyers

[Anonymous]

Anonymous wrote:

Well these terms work very effectively now in the California market, and they weed out the flaky buyers.

You guys are bad at quoting so I just came in here to clean this up. Resume your feud.

[Anonymous]

In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.

If local realtors are indeed seeing an increased issue of "flaky buyers", it is time to start to demand some or all of the above terms in any offer you consider.

[Anonymous]

Anonymous wrote:
In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.



The last two make total sense. The only real-estate transactions that should occur are with pure cash transactions. But, I still think that isn't enough. I think 100%, plus 10% should be put in escrow with every offer - just to make sure.

[Anonymous]

Anonymous wrote:
In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.

If local realtors are indeed seeing an increased issue of "flaky buyers", it is time to start to demand some or all of the above terms in any offer you consider.

Since you decided to re-post your "wisdom", I'll reiterate:

Haha, talk to us after the tech and real estate bubble pops and we will see the terms you demand. You are only able to do this because of unprecedented demand from unicorn buyers.

Watch the Square stock price, it will be a harbinger of your continued sales success; it's had a nice pop from it's messy IPO pricing, but it's still devalued from it's private financing valuation.

[Anonymous]

Anonymous wrote:
In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.

If local realtors are indeed seeing an increased issue of "flaky buyers", it is time to start to demand some or all of the above terms in any offer you consider.

Hmm, I'm guessing you became a real estate agent probably around 2010?

[Anonymous]

AgentX wrote:Because that's how it works PP. Once you are made aware of an issue by an Inspector, you have to disclose it. If you don't and it comes to light that you knew about it as the seller, you could find yourself in court and it won't go in your favor.

Citation needed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:
In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.

If local realtors are indeed seeing an increased issue of "flaky buyers", it is time to start to demand some or all of the above terms in any offer you consider.

My sibling is a realtor in southern California, far from the riches of Silicon Valley. And I can say based on her years of experience, in wealthy enclaves and middle-class neighborhoods alike, some or all of these terms have become the norm in California real estate contracts, in part to prevent the problems with uncommitted buyers that you are currently experiencing here.

Since it has become more standard in California, every buyer and seller now understands that a truly "serious" offer will include most or all of these terms. As a result most offers now contain at least these terms to remain attractive.

The good thing is this, these terms very effectively prevent an uncommitted buyer from walking away from the contract.

Some particularly effective benefits:

(1) the short five-day contingency period means that even if you enter into a contract with a potential buyer and it falls through, your house can be back on the market within 5 days;

(2) in the meantime, you continue to solicit "backup offers" during the contingency period, actually through to the sale;

(3) 20-25% earnest money makes a buyer seriously consider whether to make an offer in the first place;

(4) the transfer of the buyer's 20-25% earnest money deposit from escrow to the seller's account after five days, upon the release of all contingencies, means that even if the buyers walk away before closing you get to keep their deposit -- without having to sue them for it, to get it out of escrow; and

(5) with a closing only twenty (20) days after the buyer's offer is accepted, the buyer has less time for remorse. Even if they do back out, you have only lost twenty days, and have earned their 20-25% deposit.


As real estate contracts increasingly become more vulnerable to nonperformance (if this is happening in law-abiding, straight-and-narrow DC, we should be worried) by potential buyers, it will become standard for sellers to request these terms in order to weed out the serious offers from the others.

[Anonymous]

Anonymous wrote:

In California real estate, agents protect against flaky buyers by:

(1) requiring an earnest money deposit of 20-25% on any contract;

(2) allowing only a five-day window for inspection and release of all contingencies;

(3) contractually scheduling the closing no more than twenty days after the offer is accepted;

(4) requesting that the 20-25% deposit be transferred from escrow to the seller upon the release of all contingencies;

(5) accepting offers with no financing and inspection contingencies; or preferably

(6) accepting only all-cash offers.

If local realtors are indeed seeing an increased issue of "flaky buyers", it is time to start to demand some or all of the above terms in any offer you consider.

My sibling is a realtor in southern California, far from the riches of Silicon Valley. And I can say based on her years of experience, in wealthy enclaves and middle-class neighborhoods alike, some or all of these terms have become the norm in California real estate contracts, in part to prevent the problems with uncommitted buyers that you are currently experiencing here.

Since it has become more standard in California, every buyer and seller now understands that a truly "serious" offer will include most or all of these terms. As a result most offers now contain at least these terms to remain attractive.

The good thing is this, these terms very effectively prevent an uncommitted buyer from walking away from the contract.

Some particularly attractive benefits:

(1) the short five-day contingency period means that even if you enter into a contract with a potential buyer and it falls through, your house can be back on the market within 5 days;

(2) in the meantime, you continue to solicit "backup offers" during the contingency period, actually through to the sale;

(3) 20-25% earnest money makes a buyer seriously consider whether to make an offer in the first place;

(4) the transfer of the buyer's 20-25% earnest money deposit from escrow to the seller's account after five days, upon the release of all contingencies, means that even if the buyers walk away before closing you get to keep their deposit -- without having to sue them for it, to get it out of escrow; and

(5) with a closing only twenty (20) days after the buyer's offer is accepted, the buyer has less time for remorse. Even if they do back out, you have only lost twenty days, and have earned their 20-25% deposit.


As real estate contracts increasingly become more vulnerable to nonperformance (if this is happening in law-abiding, straight-and-narrow DC, we should be worried) by potential buyers, it will become standard for sellers to request these terms in order to weed out the serious offers from the others.

[Anonymous]

OP: We have sold three homes. I strongly think you need a new agent. When you "accept" a contract you take your home off the market, which means prospective buyers are turned away. So therefore, do not rush to accept an offer. There is always going to be 'something" on the inspection. Then their agent will open a big discussion about how you need to remedy that or disclose it to every other buyer. True and not true. We made the acceptance period very short --24 hours -- and then were completely ready to close them right out of the contract. I, the owner said, "If you can find another home just like this one for xx amount less, then you better run right over there and buy it." That tended to sober them up when they realized that any other house would have the same or similar problems. The deals closed. We sometimes had a problem with the agent bringing in clients whose fanatical paperwork was not looking sufficient to purchase the home -- ie, they couldn't afford it. No reason to take your home off the market for these offers -- they will just fall through. remember this is your one and only home and it is just a transaction to your agent.

[Anonymous]

^^ I think we may have given them 3 days to inspect.

[Anonymous]

AgentX wrote:

Anonymous wrote:

AgentX wrote:Because that's how it works PP. Once you are made aware of an issue by an Inspector, you have to disclose it. If you don't and it comes to light that you knew about it as the seller, you could find yourself in court and it won't go in your favor.

Citation needed.

Let me google that for you.

http://www.dcregs.dc.gov/Gateway/RuleHome.aspx?RuleNumber=17-2708

and: http://www.nolo.com/legal-encyclopedia/selling-property-washington-dc-what-seller-must-disclose.html

If you become aware of a defect, you must disclose.

Most people either do not bother, or they slap some paint on it.