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[quote=Anonymous][quote=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.
[/quote]

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.[/quote]

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