Bank owned homes for sale are nothing new in Bend, Oregon or any other real estate market for that matter. However, we have noticed at least one bank recently that is asking for something unusual. This bank has two homes for sale in Bend. In both cases the bank is asking for earnest money to be released to them with submission of an offer. That is not how earnest money is normally handled.
In most cases, a copy of the earnest money check is submitted with an offer to purchase a home. Once the buyer and seller agree on price and have both signed the sales agreement then the earnest money is deposited with the escrow company or the selling firm’s client trust account. With the money held in escrow the buyer then has the opportunity to inspect the home in whatever way they wish with confidence that the money will be returned to them if they find anything wrong with the house and want to back out of the deal. Buyers don’t necessarily have that option if they release the money directly to the seller before they have even agreed on a price.
By releasing earnest money directly to the seller with submission of an offer the buyer is essentially saying, “Here is my money. I think it is generous of you to allow me to consider buying your home. I know your time is valuable so if I decide not to buy your home you can just keep my earnest money.” Do you know anyone who is that generous? In one case the bank was asking for 10 percent up front. I don’t care who you are or how inexpensive the house may be, that is a lot of money to hand over before you have even agreed on price or inspected the home.
While you may not be likely to hand over the money in this situation there are many circumstances like this that can arise during the course of a real estate transaction. Whether you are a buyer or a seller you would be wise to have a knowledgable and experienced licensed broker on your side. Becky Seim, owner of Preferred Residential, is the preferred choice of many happy home owners and sellers in Bend and Central Oregon. Take a moment to read some of their stories here then give us a call to find out for yourself.