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A question about bidding on a Home?
Hello, I am currently in the process of putting in a bid on a home. I am bidding on the home with hte money in my savings account. The realtor told me that I would have to provide a proof of funds which I did. He sent me all the paper work and told me to enclose a check for the amount that I was going to bid. This is my first time bidding on a home and I wasn't sure if it was standard procedure to enclose a check with my bid? Any help would be appreciated. Thanks. My agent is asking me to send him a check for the full amount of the home.
Public Comments
- Usually, you enclose a check for the option period fee (approx $100) as well as for the earnest money (1% of the bid value). If you are not talking about using a loan, I can see where he would want to show them a copy of the check so that they know you have the money and you are serious. But let me say that again... All of these checks should be KEPT by your agent, and only COPIES should be sent to the seller's agent. Then, when an agreement is come to, he will send them over the orignals. There is pretty much no way he should actually be sending the originals. Hope this helps.
- I don't think I'd want to do that, send a check for the purchase price. You're not getting a mortgage? I think you should send a serious earnest money check, like maybe 5% or 10% of the purchase price. Not many houses are purchased for cash. My condo was, because we took a loan on another house to buy the condo outright. We gave them an earnest money check of about 10% and the rest in certified funds at closing. The title company will deduct the earnest money from the final figure, and tell you exactly how much to bring in certified funds. If you do give your agent a check for the complete amount, he shouldn't give it to the seller or the seller's agent. Customs vary but I just don't think I'd want to do that. When you're buying a house for cash, I understand they want to be sure you can actually do that, but at the same time, in the current market you should have a little leverage because you're the perfect buyer.
- When you submit a bid for real property you never submit any funds of any kind. Even if you were to make a cash offer you wouldn't turn over any funds at all. You may be asked to provide proof that you have the means to purchase the said property, such as a bank statement or a letter of pre-approval from a lender. But that is all. If the seller is satisfied your bid meets their criteria, they accept it. It is customary to submit then, and only then, an "earnest" amount, which is an amount you determined when you wrote the offer and made your bid. Customarily this amount is about $1,000. I always offer at least this much in earnest. If the deal closes, this $1,000 is applied toward the purchase price of the property. http://www.springboardblog.blogspot.com
