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Posted via email from The Wake Forest NC House Chick!!!

Earnest Money - What Is It and How Much is Required?

Earnest Money - EMD - Deposit - whichever term is used in your locale it is extremely important to know what it is, what it is used for and what the appropriate amount is.  I will use real life to demonstrate the importance of educating other professionals, buyers and sellers the necessity Earnest Money.

I had a buyer couple from out of state.  They were the nicest, most hard-working, upstanding people that you would ever want to be around.  They placed their property for sale in the "other" state with Agent X so that they could start the preparations for the move to North Carolina.  It didn't take long.  Agent X received an offer from Agent Y that was representing the buyer.  The initial offer came in with $0.00 Earnest Money.  Let me put that a few other ways for you to understand.  ZERO - $o.oo- zip, zilch, nada. 

I was not privy to any of the negotiations with their "other" property as things happened literally within hours.  Their agent, Agent X, countered with earnest money of $300.00.  Again, for emphasis, THREE HUNDRED DOLLARS!  I did not know any of this.  When I would ask my buyer any questions they said that their agent was handling things beautifully.  Okay.....

We find THE house in the Wake Forest area.  I mean THE house!  Their property is under contract so all is contingent.  Before writing our offer I informed my buyer that I needed a copy of their Offer To Purchase for the property in the other state.  I wanted to be sure that the contract looked good and, of course, had to have it when we submitted our offer. 

Agent X obliged and emailed me the contract.  I was FLOORED when I reviewed it.  I immediately called my buyers (Agent X's sellers) and asked if they understood what the earnest money was for, what did they know about the buyer, were they pre-qualified or pre-approved, etc.  I then explained that if the deal feel apart and provided the stars aligned perfectly that they would only be entitled to $300.00.  Again, I was informed, no worries - "Our agent is great and this is solid."

Once my buyers had reviewed the information that I gave them by way of comps, etc they were prepared to make their offer.  When it came to Earnest Money they were floored.  I explained to them that customary for our area is 1% - 3% of the purchase price.    They couldn't understand why.  I explained to them what earnest money is for.  It can be viewed as "good faith".  It can convey a level of seriousness.  By putting up a larger amount of earnest money it shows the seller that you are serious about buying their house.  It also indicates that you have taken the steps necessary to be pre-approved since you (as the buyer) may lose that money should the deal fall through.  It is a level of commitment to the process.  It is an indicator of your intentions.

Once it was explained my buyers understood completely and were now kicking themselves for not asking for much more in their transaction with Agent X and Agent Y. 

Moving forward, all seemed to be going along quite well with one exception.  There was minimal communication between myself and Agent X.  Not due to a lack on my part.  I emailed, I called and I even sent up smoke signals - nothing in return.  

First closing date approaches.  My buyers lender says it's a "go" for closing.  FINALLY I hear from Agent X and I am told that there were a few hiccups.  Okay - we've all dealt with those - they happen.  We pushed the closing out a little further.  Two days prior I find that they are no longer hiccups but belches.  It would seem that the buyer in the other state had decided it would be okay to buy major purchases and write some not so worthy checks prior to closing.  Yikes!  The deal was pushed to a Mortgage Broker that claimed "I can get any loan through."  Well, guess what?

DENIED!  By TWO LENDERS and a Mortgage Broker!

My buyers deal flopped.  For all of my buyers troubles they "might" get $300.00.  That's it!  They now CAN'T move to NC and the husband will have to call Monday to decline the position he was offered here.  Not only can they not buy the house but their life has been dramatically altered.  Will my buyers lose their $1500.00?  Technically, they should.  However, the other agent here and myself have been in very close contact and they have been a dream to work with.  There may be a chance that it will be returned to my buyers.

So, to whomever is reading this, whether buyer, seller or fellow agent - PLEASE be sure you understand every piece of an Offer To Purchase and the consequences should a deal not go through.  Don't let any agent rush you through a contract - take all the time you need to really understand it!

As for me and my buyers?  We'll figure something out - that's what I am here for.  I have listened to numerous tearful phone calls this afternoon.  It was my job to tell them that we will work through this.  Just because this deal didn't work doesn't mean that their aren't alternatives.

Really, I Am Not Being Rude - Please Respect My Need For Personal Safety!

I don't know why, but I still find it amazing when Potential Buyers get mad at me for not dropping everything at a moments notice and meeting them at a vacant house.  Mind you, complete strangers! 

By my nature, I am a friendly person, never met a stranger and can ALWAYS strike up a conversation. I love meeting new people and finding out what they are about, how they live their life, what they enjoy and what we have in common.  My career also dictates that I have this pre-determined outgoing nature - I mean, really?  How can one sell Real Estate if they don't like meeting new people.

What may be one of my greatest assets could one day be my demise if I didn't adhere to my own personal "Code of Safety" and listen to my common sense.  There are simple rules that I self-administer and well, quite frankly, if a Buyer or Seller can not appreciate them and/or respect them then we simply weren't meant for each other.

1. I will NEVER respond to an email from a stranger and agree to meet them at a vacant home.
2. I will NEVER respond to a phone call from a stranger and agree to meet them at a vacant house.
3. I will NEVER host an Open House by myself.
4. I will NEVER work with any buyer until there has been rapport established and identity verified.
5. I will NEVER meet a COUPLE at a vacant home. 

If you call me/email me and I don't know you then be prepared to meet in a public place, answer questions, and verify your identity.  I am a wife, a mother, a daughter, an aunt, a friend to many and I love my life and security. 

If a Buyer can not respect these wishes and rules of mine then perhaps they are better suited with another Realtor®.  Keep in mind, though, I am not a bitch,  I am just smart.

Recent cases of Unpleasant Realities*:

• St. Louis, MO - A man posing as a home buyer waited until he got a 24 year old real estate agent in an unfinished aprt of the basement and then pulled out a handgun.  He handcuffed her and sexually assaulted her, at one point putting a knife to her throat.  Afterward, he robbed her and warned her not to scream for help before leaving her alone in the new home she thought he wanted to buy.
• Liberty Township, OH - A man wearing a ski mask showed up at a model home.  The on-site agent immediately asked the man to leave and closed the model home's door, but the agent later found the man standing inside the garage.  The man grabbed her, but she fought him off and he fled the scene.
• Cary, NC - A man registered in a neighborhood's model home, then asked to see homes in the community.  Once the agent had taken the man to another home in the development, the man pulled out a knife and attacked the agent.  She was bound and sexually assaulted. 
  

*cited from the 2009-2010 NC Real Estate Update Course

The incident in Cary NC, for those of you that don't know, was literally 10 minutes away from me.  While many may always have the feeling "that could never happen here" - THINK AGAIN!
I would be remiss if I didn't also mention an incident that happened to my West Coast Sister, Cristal Drake.  She was robbed at an Open House in July 2009.  I'll never forget how I felt when I read her post - she really is my kindred and I just can't imagine.  You can read about her unfortunate event at her blog post......  Be On The Lookout for These Open House Thieves! North Orange County Agents PLEASE READY!

I don't care if you are a SEASONED AGENT or NEW TO THE BUSINESS - NO SALE IS WORTH YOUR PERSONAL SAFETY!  End of story and there really is no discussion needed.  There are many tips that I could give as both an agent and a Broker-In-Charge.....

• ALWAYS have new clients meet you at your office or public place such as coffee shop, etc.
  
• When at all possible - have another agent go with you when working with new clients.
• If you get that icky feeling - ALWAYS go with your instincts!
• Have a code word set up between you and your office so that when you are out and about showing you can call your office and they will instantly know that you need help.
• ALWAYS leave an itinerary of where you are showing with either your BIC or another agent in the office.
• Keep you cell phone on you at ALL times!  Have 911 programmed into speed dial.
• There are many "tools" that are available for protection now available nationwide through the various Association of Realtors® offices - explore them and find one that you are comfortable with.

And for all of you buyers reading this right now.  Yes, you are what keeps me going in my career and without you I wouldn't be as successful as I am.  However, there are quite a few "YOU'S" out there and if you can't respect my wishes then how can I possibly respect yours?

Are You Still Renting? Check Out This Amazing Home for Sale in North Raleigh NC!

4509 Cobble Creek Lane is located in North Raleigh near Hwy 401 and is convenient to both I-540 and Capital Boulevard!

This sparkling 3 bedroom home has an Open Floorplan with a Fireplace in the Family room, arched entry into the Formal Dining Room, a passthru from the Kitchen to the Family Room and a large open foyer! The fantastic kitchen has loads of cabinet space and counterspace, a pantry and has easy access to both the Family Room and the Dining Room. French doors lead to patio and back yard which has a garden area and a tree buffer in the rear of the lot.

Upstairs is an oversized Master Suite with deep trey ceilings and a private En Suite bath with shower/garden tub combo. Huge WIC in master and large linen closet in bath. Secondary bedrooms are generous with ample closet space and share a full bath in the hall. The bonus room has vaulted ceilings and is the ideal spot for a homework area, playroom, hobby room or in home office.

This home is complete with a one car attached garage!

Come see all that 4509 Cobble Creek Lane in Raleigh NC has to offer - you will pleasantly surprised with all the architectural details, the spotless condition and the new and improved price!

$157,000.00

"4509 Cobble Creek Lane, Raleigh NC"

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