IS IT ME OR THE THEM
I've read books and seen post on this site from people who claim that you can put up as little as $10 earnest money.
All the sellers that I've met with are asking for thousands of dollars and I don't have the cash to put up.
Maybe I'm not good at negoitating or maybe the sellers are not really motivated. How can I overcome this obstacle?
I'd say they aren't motivated enough.
If the sellers are asking for and willing to demand thousands down, they probably just want a good deal on the house.
Course if its pre-foreclosure or of the such, and they are asking thousands down, maybe they just don't want to throw away thier equity for nothing and are trying to get the best deal from a possible posse of investors suiting them.
Justise is right - motivation is the key(as well as general education and knowledge of the seller). If they know what the industry standard practice is(and in a standard non-distressed real estate transaction in Chicagoland area, $1000 earnest money is common practice), they will ask for it.
If the seller is less educated and doesn't know the common practice, they may agree. Like they say - you have to kiss a lot of frogs before you find your prince. Same thing here. You will have to make a LOT of offers before you find someone willing to take $10 as earnest money. The key is that to that seller, $10 has to seem like a LOT of money.
There's no law that says you have to put earnest money down.
Give em your offer and they can take it or leave it.
the ernest money is just to bind the contract, other monies, if agreed to be given, they will get when they move, when you close, in 2 years, 5 years, 10 years, whenever depending on the situation.
There are people out there that will give you their house, but you just have to find them.
I don't mind giving a seller thousands, it's just WHEN they get it is my only concern.
Sure Mr./Mrs. Seller, you can get 5k...however you will get it when I get my buyer........
I'll give it to you back in installments, amorz. over 30 years all due in 5 years.
Play with it, structure it to where you are giving them the money when you want to and you are also making a profit.
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Here are the key elements of a binding contractCompetent Parties - For a contract to be valid, each side must have the capacity to enter into it. Most people and companies have sufficient legal competency. A drugged or mentally-impaired person has impaired capacity and chances are a court may not hold that person to the contract. Minors (e.g., usually those under eighteen) cannot, generally, enter into a binding contract without parental consent, unless it is for the necessities of life, such as food, clothing, or for student loan contracts.
Consideration - If the other side is to be held to the contract, you must give up something in exchange. This is called consideration. No side can have a free way out or the ability to obtain something of value without providing something in exchange. Money is the most common form of consideration, but it can also be property, giving up a right or valid claim, making a promise to do or not to do something, or anything of value. Agreeing to perform an illegal or illicit act is not consideration and the contract is void.
Agreeing to purchase a seller's property for $150K is sufficient consideration. Something of value, real property, is exchanged for something else of value, money. Earnest money is often given as a demonstration of good faith, but is not necessary to "bind" a real estate contract.
Mutual Assent or Meeting of the Minds - This means that each side must be clear as to the essential details, rights, and obligations of the contract. Putting the deal down on paper prior to signing it goes A LONG way to avoid future misunderstandings and disputes. Meeting of the minds sometimes can be expressed by words spoken or gestures made or can be inferred from the surrounding circumstances. There is no meeting of the minds if: (1) one side is obviously joking or bragging, (2) there is no actual agreement (i.e., the farmer who is selling a gelding and the buyer thinks the horse is a brood mare), or (3) both sides have made a material mistake as to the terms or details of the contract.
Thanks Dave, this is valuable for everyone in this thread.
Eric & Rosa
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