Everything A Real Estate Agent Doesn’t Want You To Know! Part-3
MONEY MATTERS
Are you considering purchasing a new home?You may want to read this article. It’s amazing home buyers give agents large "good faith deposits" when they put an offer on a house. I have had clients that have given agents thousands of dollars when they make an offer on a home and it is one of the dumbest mistakes a home buyer can make! Why? Well, you most certainly have to have a absolutely general understanding of contract law (this is clarified in detail in my report) but the short answer is: Every purchase offer is half a contract-it becomes a contract when it is accepted by the seller.
Any and all contracts are required to give consideration and consideration is anything of value. Money is consideration. So when a home buyer writes an offer and gives a good faith deposit, the good faith deposit IS the "consideration" which makes the offer a contract when accepted by the seller. So the money is what makes the offer binding. When people offer large sums of money as good faith agents LOVE it!
Why? It shows the buyers are serious. On top of that while the agent has the money in escrow it is out of the buyers control. That gives agents control.
It is largely unknown that $1.00 can be a consideration just like $10,000. And, when it comes to financing, large good faith deposits don’t really do anything to improve the chances of a buyer getting a home loan. You see, that large good faith deposit can be kept in YOUR pocket until you take an application on a loan. In this case, a buyer who wanted to put a large down payment on a home can pay it to the LENDER instead! After all that is where the deposit ends up- with the homes down payment. So how come give it to the real estate agent? Daily people hand the control of their money over. Either you’re financially able to get a home loan or not. While a large down payment can help over come funding objections, the agent plays little or no role in the financing end of a real estate transaction. If a borrower is unqualified to borrow a home loan, a very large good faith deposit won’t change that fact.
And buyers better stop and think about the purchase offer! Agents tend to do all the negotiations on the face of an offer and (seeing how it’s half a contract) that tends to be d.a.n.g.e.r.o.u.s! Your attorney should review it (.) Typically the agent will tell you that you need to move fast before the deal is gone. That may be fact but you’re leaving yourself open for mistakes in judgment when rushing. If you like the potential for financial pain, do it their way. However if you go about it my way you will protect yourself from legal and financial standpoints.
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Want some advice? If you are planning on buying a home go to my EBay Store SMART Books and More and order the book "Everything A Real Estate Agent Doesn’t Want You to Know" for $14.95. I Not trying to hype up the book but I guarantee it will save you thousands while protecting your legal and financial interests. If you’re not satisfied with the book return it. Have you ever tried to send a house back?
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