Thread: Amount down @ contract

Advice -

Here's my advice - reread the first sentence in your post.

Why isn't your property on the market now ?? If you need to sell before you buy - then get to selling.

Again - this sounds like your going into this representing yourself - bad idea. Why would you enter into what is probably the largest financial deal of your life - clearly not understanding all the issues - without a seasoned pro at your side offering you guidance. As far as the 10% issue - sounds like you were talking to a listing broker - and they weren't taking you seriously either. Sounds like it was a nice way of showing you the door.

My advice -
1- Decide whether your serious about buying or are you just dreaming.
2- If you are serious - begin interviewing RE Brokers to list your current property for sale - and get selling.

Your listing broker will be able to sell your property - help you find your dream house - and guide you seamlessly between the two.

Good Luck-
Glenn

Depending on the seller and the price of the transaction, some seller's may want 10% as a deposit. This is not incredibly common but it does happen and the request is probably legit, especially if you are dealing with a corporate or "bank owned" seller.

If you do need to sell your home prior to purchasing another one (and you're making an offer on this house), your house needs to be on the market yesterday. A bridge loan may carry you for awhile but even then bridge loans do have some restrictions and one of them would be that you have to be actively attempting to sell your home (and they don't let that go FSBO from what I've seen either).

You need some professionals on your side, not representing the seller's best interests. Find a reputable loan officer to explain to use bridge loans and how the process works. Also, you may be stuck with the listing agent seeing as he / she appears to be the procurring cause of your interest in the property. Unless you CLEARLY explain that to another agent you want to represent you, DO NOT try to get another agent to represent you for that property as they may be working for free when all is said and done. If nothing else, hire an attorney if you are dead set on this.

I have a related question: I understand that once the contract is signed with your (buyer's) 10% downpayment, if you changed mind and withdraw the offered price, then the seller will not return your downpayment. But what if the seller withdraws the offer? The buyer would have no way to penalize the seller?

If there would be any recourse for the buyer it would be within the contract or addendum. I've yet to see any of my clients' addendums have such terms or accept any of those terms if the buyer had proposed them.

Hello-

In the event there is a valid real estate sales contract that exists between the buyer and seller - and the seller cancels the contract. The buyer can seek recourse through the court system seeking a judgement of specific performance. Simply stated - your legal remedy is to enforce the contract through a judges order - and compel the seller to carry out the terms of the contract. In the few cases where I've actually seen a buyer sue a seller for specific performance - the case was settled pre trial with the seller making some financial restitution to the buyer

Glenn

Originally Posted by [LEFT

animalloverdb[/LEFT];62059]We are interested in buying another home, but need to sell our home first. The potential home is old and needs to be winterized; having been used as a summer home.
We would make an offer on this home with the contingency of selling our home (and engineer report). The real estate has told me that we would need to put 10% down at contract since the seller would be taking the house off the market. Is this accurate?
We originally wanted to use a bridge loan to finance the contract. RE has told us we cannot use a bridge loan with contingency..only to go through with the sale not based on the sale of our home. I am not familiar with the process of bridge loans.
Advice?
thanks

Buying a house contingent on selling your house is a lose-lose situation for you.

First, the seller of the house you want to buy has the dominant position over you, as demonstrated by demand for the 10% deposit, and you will probably pay close to full price. And, the seller will be able to kick you out of the contract if they get another buyer.

Second, the pressure is on you when selling your house so you will end up selling for less then you would if you didn't have a contract on another house.

Your best bet is to walk away from this house, put your house up for sale and use the time it takes to sell your house to shop around for a house. In this market this house might still be for sale when you get yours under contract and you will then be in the power position and you can tell the seller what you want to do.