patrick.net

Just make sure the language is clear in the purchase agreement that the EM will be returned at the sole discretion of the buyer and then understand the provision and how it works.
Also, get a really good broker (and do not compromise). Vast majority of agents are idiots!

gabbar says

How can a home buyer ensure that the earnest money deposit is returned back to the buyer when the agreement becomes void because of any reason? Seems to me that the agent and the broker would like to keep this deposit.

Read the contract. They're different across the country. It takes 10-15 minutes. Cross out any language you don't like as the buyer. You're the one bringing the money to the table. You've got the leverage. Make sure to initial any changes you make and don't do a final signature until you have the sellers initials and signature on it. Remember too that you have attorney review and inspection period. Brokers CANNOT take the EM if you kill it during this period unless the contract stipulate they can. Again read it thoroughly. Don't trust ANY broker or ANY attorney. They're going through the motions.

That is one of the biggest mistakes bad agents and buyers make. All that said, unless you're dealing with a complete shit head brokerage, I've only seen EM taken in 1 or 2 instances over 1k deals I managed. It's a very rare scenario.

I used a RE attorney when I bought my house. I did all of the leg work to find the house myself, then brought in an RE attorney I knew, when I was ready to make the contract.

Best thing I ever done, he saved me a ton that I was asked to pay, but the lawyer told me not to.

WookieMan says

Make sure to initial any changes you make and don't do a final signature until you have the sellers initials and signature on it

So the seller should sign and initial the agreement followed by the buyer signing it?

gabbar says

WookieMan says

Make sure to initial any changes you make and don't do a final signature until you have the sellers initials and signature on it

So the seller should sign and initial the agreement followed by the buyer signing it?

It's mostly about the initials to the changes you make. And you can make any changes you want, just the seller has to agree. You can always type up additional addendums. But if all initials from the seller are not done (and signature of course), it's not a valid contract.

It pisses attorneys off when you don't just keep the boilerplate contract intact, but this is either the biggest purchase of your life or an investment. Both are equally important to get right to not get screwed.

I will add this. And it will sound pompous. But if you cannot afford to lose earnest money, I'd maybe rethink buying. Never get in over your head on a transaction if you cannot pull it off for some reason. And this is a biggie, never do a credit pull if financing after already being pre-approved by your lender. Basically don't go to the furniture store and buy a couch and bed on credit for the new house. Or a car. That's the easiest way to lose your earnest money as the lender pulls credit again near closing.

Tenpoundbass says

I used a RE attorney when I bought my house. I did all of the leg work to find the house myself, then brought in an RE attorney I knew, when I was ready to make the contract.

Best thing I ever done, he saved me a ton that I was asked to pay, but the lawyer told me not to.

Didn't the lawyer charge $300/hr?

gabbar says

Because buyers really don't need agents.

A good Real estate lawyer may change a few hundred an hour, but how many hours will it take them to review a contract? One? Two? They've done this hundreds of times and know what to look for. Most contracts have fairly standard boiler plate anyway.

Even a few thousand to a lawer is cheaper than paying 2% (or more) to a realtor on a $300,000 + house. And yes the buyer ultimately pays for the real estate agents involved..not directly, but in the end the money the buyer brings to the table goes to paying off the transaction facilitators.

I used a lawer, no agent, negotated with the seller direct, and saved myself $$$. Not gonna lie it was stressful, but I got it done.

zzyzzx says

Because buyers really don't need agents.

Right, it seems to me that the goal of the buyers agent is to sabotage the buyer.

WookieMan says

I will add this. And it will sound pompous. But if you cannot afford to lose earnest money, I'd maybe rethink buying. Never get in over your head on a transaction if you cannot pull it off for some reason. And this is a biggie, never do a credit pull if financing after already being pre-approved by your lender. Basically don't go to the furniture store and buy a couch and bed on credit for the new house. Or a car. That's the easiest way to lose your earnest money as the lender pulls credit again near closing.

I hear you. A important lesson that I learned someone at this site is this; buy the smallest house that will fit your needs and not the biggest one that you are technically qualified for.

gabbar says

zzyzzx says

Because buyers really don't need agents.

Right, it seems to me that the goal of the buyers agent is to sabotage the buyer.

There doesn't seem to be any incentive for a buyers agent to negotiate a lower price if they are working for a percentage. If a buyers agent gets 2% of a $500,000 transaction they earn $10,000. If they talk the seller down to $450,000 they only get $9,000.

I wonder if it would work if you offered your agent 2% if you have to pay $500,000 or $20,000 if they can get the price down to $450,000?

gabbar says

I hear you. A important lesson that I learned someone at this site is this; buy the smallest house that will fit your needs and not the biggest one that you are technically qualified for.

Something has to break here in the East Bay. A 2 bedroom shack on a postage stamp sized lot next to the refinery is asking over $600,000. Loan costs would be over $3000 a month! A nicer place in a nicer neighborhood rents for $2,600. CoCo county average household income is $104,000.

Onvacation says

I wonder if it would work if you offered your agent 2% if you have to pay $500,000 or $20,000 if they can get the price down to $450,000?

No because the system is not set up to make this possible. In other words, the system incentives unethical behavior of buyer agent.

Right now is not the time to invest in housing. Prices may continue to climb for a while as it continues to be a tight market. If you are a homebuyer, or a young person looking to buy a home, you need a bit of a reset. We need to get back to a place where supply and demand are back together and where inflation is down low again, and mortgage rates are low again. - Federal Reserve Chairman Jerome Powell, June 14, 2022