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REALTOR® Emeritus |  | KEEPING THE TRANSACTION ON TRACK | | ||
|  Keep the Transaction on Track Advanced Tip Advanced Tip Advanced Tip Broker Tip Getting to Close Advanced Tip Mortgage Basics Advanced Tip Advanced Tip Advanced Tip Inspections and Repairs Broker tip Closing Countdown Advanced Tip Going for the Close Advanced Tip Advanced Tip Advanced Tip Commission Disbursements Broker Tips Broker Tip Post-Closing Strategies Quiz: Contract to Close Bright Ideas: Contract to Close Code of Ethics: Contract to Close More Resources: Contract to Close | For the Advanced Salesperson: 2 Strategies for Resolving Earnest Money Disputes Purchase contracts often contain specific guidelines for distributing earnest monies when buyers can’t obtain financing or inspections aren’t satisfactory. However, if the deal fails for less concrete reasons—a job transfer, buyers’ remorse—distributing earnest money may require some negotiation. If the buyers do decide to pull out, the sellers and you as their agent have several options. · The best alternative, from the sellers’ point of view is a release letter from the buyers that cancels the contract and gives all earnest money to the sellers. This resolves the issue and may prompt a reluctant buyer to close and gets the property back on the market rapidly. · If the parties cannot come to a mutual agreement about the distribution of the earnest money, holding the money in an escrow account is your best course if the parties can’t agree who receives the funds. Notify the buyers by certified letter if you take this action. Eventually the dispute will be resolved or one party will sue the other, and the court will instruct you how to distribute the money. Adapted from “Resolving Earnest Money Disputes,” Mitch Klein, West Virginia REALTOR®, Spring 1993. TIP: Never give the earnest money to the sellers before the closing. You might incur liability for the funds if the sale fails to close. For the Broker: 5 High-Risk Transactions Every real estate transaction has risks, but some more than others. 1. Sales with no money down 2. Sales where the owner takes back financing 3. Sales where the settlement is scheduled far in the future 4. Sales that involve the transfer of cooperating interests 5. Sales that feature adjustable-rate financing, balloon payments, or zero-interest mortgages. Adapted from Successful Real Estate Negotiation, revised edition, Peter G. Miller and Douglas Bregman, HarperCollins Publishers, 1987 Staying Involved Without Alienating the Attorney > | |