What happens first?
 

Hi all,

I've got a general question about purchasing a resale home in TV.

So you visit a home and want to proceed. Do you need to put down the "earnest money" first, THEN engage a home inspector? Is the "earnest money" returned if the inspection fails?

I know that if the sale goes ahead, the earnest money is applied to the sale price.

Thanks!

In your purchase agreement you need to have an inspection contingency period. Usually 5 to 10 days.

You would both sign the agreement and the buyer would need to put down their EMD.

Then you schedule your home inspection within the contingency period. If the results of the inspection are unsatisfactory to you, you can get out of the purchase agreement and you get your EMD back.

You officially make an offer sign, and give a check to your agent, then it is submitted to the seller, if seller says no check comes back to you, if they counter you can choose to proceed check goes to escrow account, or you don’t have to counter and check is returned to you.

If owner is selling on their own you should seek advice from a title company or your bank

First, you make a written offer and include the earnest money as a check to the real estate agent. Personally, in this market, I would make an offer that is lower than the asking price. Always remember that the agent is working for the seller, so do not reveal any information that you don't want the seller to know. You negotiate a final sales price and sign a sales contract that includes an inspection contingency. Then, you hire an inspector who will provide you with a report that will include defects that you should ask the seller to fix. The sales contract will describe your options and the seller's options for dealing with the defects and whether you will proceed with the sales contract. As long as you don't violate any provisions of the contract, you will get back all of your earnest money if the sale does not go through. Good luck.

If you would like to buy the house, you instruct your agent to make an offer. Only once the offer is accepted do all the other wheels start turning. Both you and the seller agree on a closing date & the inspection is made during that time before the closing. Hopefully, the inspection is made fairly soon, as this will give the sellers time to fix any items found in the inspection. You may decide to re-inspect, or you may take the receipts of repairs as proof & proceed to the closing. It's up to you. If however, the inspection turns up something you would rather not live with, then you can back out of the deal, providing a fail inspection clause was written into the offer.

Not necessarily. You may not be able to get out of the contract, depending on the wording of the inspection contingency. Typically, the seller has the option to correct the defects, and, if so, you are bound by your offer.

Try to make sure your deposit is refundable if your contingencies are not met. Nonrefundable deposits are just that, not refundable, can have their uses under certain conditions and may become necessary in the acquisition of residential properties during sellers' markets. One can also split a deposit into refundable and nonrefundable portions. It is all part of negotiations. Asking a seller to take a home under contract off the market during a buyer's due diligence period might be a reason to provide a nonrefundable deposit. If the seller can continue to show the property for back up offers, maybe not. A good buyer's agent can help as they are up on current market conditions. Be aware the listing agent usually works for the seller although many agents try to be transactional agents or even try to obtain non-agent status to limit their liability.

Here is the Florida statute governing the various types of possible real estate brokerage representations and non-representations.
Chapter 475 Section 278 - 2023 Florida Statutes

I would just take issue with your reference to "your agent". Typically, a buyer does not have an agent, and the agent that is showing houses is representing the seller. A buyer should never tell the agent how much they are willing to pay for a house during negotiations.

A non-refundable deposit can be a seller's nightmare. I learned this the "almost" hard way. I say almost because we caved and just gave the guy back his money. Why? Because the potential buyer's lawyer said he'd tie the deposit - AND the sale of our home - up in court. We couldn't afford that, our own funds were running out, which was why we put the house up for sale in the first place. We would've been homeless and in massive debt if we had to /not/ sell our house for 6 months or longer just because some idiot decided to back out after making an offer that was accepted.

I agree with this post. When looking at the home, if you notice something not right, place it as a contingency in your contract. Roof looks weathered? Leaks? Unexplained patches in walls? Appliances making funny noises? Add whatever you notice as a contingency for inspection. Sometimes, the seller will agree with your purchase price and contingencies. Some may try to accept your offer but want to negotiate your contingencies. If they play hard ball with noticeable expensive repairs, move on! Not worth the trouble. It is best to place your deposit in escrow. You will have no problem getting your money back if the sale does not go through. As long as you do not violate any provisions of the contract. This last line is important.

Find a good realtor that represents you as a buyer. He/She will be able to work out this and other important details on the purchase.

Out of curiosity, can the buyer's deposit need to be returned if the inspection didn't show any issues, but the buyer just wanted to back out?

is it reasonable to find a reputable inspector in 5-10 days?
I may be going through this very soon.
How do you find one not associated with sellers realtor?

If this is a first time buying experience please engage either a lawyer or a real estate agent, not a village sales person

The buyer’s real estate agent handles those details. You do have a one, right?

That would usually be a breach of the contract. The seller can refuse to return the deposit and even sue the buyer. But, sometimes, it doesn't happen that way. Some listing contracts specify that the listing broker is entitled to half of an unreturned deposit, so the broker has some rights regarding whether the deposit is returned. Some brokers do not want bad publicity, so they will return the deposit, even though they are not legally required to do so.

You need to hire yourself a buyer's agent because there are lots more questions than this to ask and very expensive mistakes to be made if you don't.

Tell us what your sales person said to this situation.

Have a realtor submit a contract for consideration, if accepted or negotiated, you have 3 days to pay to the selected title company an earnest money deposit. Then you have an inspection period ( which time frame is negotiable) to complete all due diligence. Inspections, reading deed restrictions investigation of CDD bond, insurance etc. your agent should assist with all of this. If you are financing, you will need to officially apply, not a pre approval or provide proof of funds. Plan on 30 days from signed contract to close. Good luck. Obviously I am a realtor. Andrea Bonivich Worth Clark Realty

Yes, inspection does not just mean physical inspection, it can be deed restrictions or something else

If an inspection comes back not to your liking, you must write into the contract you want your EMD back. Otherwise all the homeowner must do is satisfy the home inspection problems. You cannot get out of the contract unless you add it in writing!

The buyer could always ask. But the seller had taken the house off the market once that offer was accepted and now lost any potential buyers during that time. In other words it cost the seller valuable listing time, and prep work for their own move. Buyer should not expect a refund because of cold feet.

When I sell house and jump through all hoops IMO the earnest money for all inconveniences specifically the last week when I’ve packing up spending money and then they pull out last day.

Though it’s never happened to me. But, in opinion that’s so I don’t take big loss plus chance or another buyer going elsewhere. Most item found on inspections are cosmetic and can easily be negotiated. If somebody has buyers remorse then they lose 5 or more grand. 5 grand would be minimum for me to consider sellers offer.

Good luck with that. IMO most sellers will say “see Ya”

Great advice. First, do your own inspection. You can decide what to ask for? Then if you want to proceed you might hire an inspection firm. Watch the inspectors contract - some will want to sign a clause that says inspector isn't responsible for any lousy advice they give you.

Is this an MLS listing or a VLS listing? How I'd go about it would be different depending upon which.

When we bought our house it was listed via MLS. I had an MLS agent representing me, responsible for MY interests, not the seller's.

Our purchase offer was contingent upon an inspection, and there was a dollar amount set, I think it was $1500. If upon inspection the cost of needed repairs was less than that, seller was obligated to repair, and we were obligated to buy. "Cosmetic" issues were not included in the inspection contingency. The inspector found a few things (missed a few things as well), seller made and paid for repairs, and sale went through.

If the cost of repairs was going to be more than $1500, seller had the right to back out.

The question has been asked, what if the buyer just got cold feet and wanted out, not based on any inspection finding, just got scared. That gets dicey. I have seen that go different ways. A lot depends upon who holds the money, and who wants to be held up with a potential law suit. The parties can agree on some sort of restitution for the inconvenience to the seller, or absent that, someone can get sued. Of course, who will win depends largely upon the language of the contract, and that is why, unless you are very savvy yourself, you should have a professional helping you.

Get a Realtor, not a Villages sales agent

I understand your thread is specifically about contracts. But, your question "What happens first?" caught my eye. IMO, first you should investigate the neighborhood and surroundings. You do not want to end up with a home that has outside issues. Drive around the neighborhood, listen for noise, pay attention to the traffic, talk to the neighbors and ask if there are many rentals, visit the recreation areas to see how crowded, and any other issues you feel are important. Investigate several times at different times of the day. I was forced to move because of renters. Others move because of traffic, noisy neighborhood, incessant dog barking, etc.

It costs a lot of money to move if you find the neighborhood and surroundings are not what you anticipated. Realtor fees to sell alone can be $25,000+. Do not make an expensive mistake. Remember: Your agent's primary focus is receiving a commission. YOU are the one who will have to put up with the problems after moving in. DO YOUR RESEARCH

For perhaps the biggest purchase of your life that will involve a great deal of your money, why on earth would you want to rely upon the word of non professionals opining on TOTV. I am sure these people are well meaning but they are not lawyers and most are not realtors.

Ultimately, you will be signing a contract, one that will bind you to pay certains sums, perhaps based on some eventualities. Not ever real estate contract is the same.

For my money, I would spend a few hundred dollars on a lawyer, not a real estate agent or realtor. The lawyer can write a contract that specifies your requirements, not the general requirements contained in boilerplate contracts.

Personally, I have, as a seller, never accepted a contract that contained contingenicies such as a financing contingency or that would force me to make any repairs on the property. I allow a healthy period of time for the buyer to inspect the property and then the buyer can either take the property as is without any change in the sales price or walk from the transaction with his deposit check. A realtor would never let me do that....not because it is in my best interest...but because it is in the interest of the realtor to make the sale and earn his commission. I find most realtors to be swarmy and not worthy of ethical respect. On the other hand, when I tell a lawyer what I want in a contract, he or she makes it so.

As a buyer, there are many steps in the process. Make no mistake, this is a big purchase. It involves a large sum of money. I want a lawyer on my side and that can be bought for a few hundred dollars. Trust a realtor at your own risk!

Great post. It is better to have a real estate attorney and a home inspector (you hire) on your side when purchasing a home. A buyer's agent cannot supply you with this backup. They can only give advice.