Your generous offer for the Property has been approved by the seller, you are excited about the new purchase and are ready to sign the dotted line to finalize and seal the deal. It is also the time that you put some money down to prove that you are really interested in the property.
The amount of the money put down by the buyer generally depends and varies by the state law and local market. It varies from few thousand dollars to 3 percent of the price and in some parts of the country it can go up to 10 percent.
The thing about the escrow Deposit is that while it is a sign of good faith it cannot be touched or moved without the written consent which must be signed by both seller and the buyer.
The amount is negotiable but if you put in less than what is customary in the local market, it may not pan out especially if the market is competitive. It by any means doesn’t imply that you cannot get the deposit back.
Below are 3 simple ways to protect the deposit.
Know the property
Every house must have inspection of some kind before it is sold. For older houses the inspector will check for the roof and foundation and everything in between. You can also appoint special inspector such as air conditioning specialist, termite inspector, pool inspector etc. if inspection uncovers some problem which you find that cannot live with you can have your full deposit returned.
Get in writing
If you are financing your purchase then you will need a written notice which says that your loan has been approved. In today’s tough lending standards contingency has become more important than ever. Before moving forward the buyer receives written approval from the lender. So, in any case if the loan is denied to the buyer in future, the buyer can exit the contract and get the deposit back.
Read carefully the property disclosures
Seller in most real estate market are required to make disclosures about the property such as property defects, neighborhood nuisances etc. As a buyer you will have the opportunity to read these disclosures. So if you find something negative you are free to say “no thanks” to the seller and can move on.
Keep track of all the payments, invoices and analyze them to prepare the reports to get the better picture of your business. With SimplifyEm property management software managing multiple properties is very easy. Not only you end up saving the time but you also save money in the whole process which means more profit.