As a San Jose Short Sale Specialist I am often asked: “Why are we required to put in a good faith deposit BEFORE the bank approves the short sale? “This is often followed by: “No one else requires a deposit.”
My response is typically something like this: The reasoning is that buyers must have skin in the game. It’s measures buyer commitment.
Think about it … would you write an offer on a bank-owned REO without a deposit?
Would you write an offer on a traditional sale without a deposit?
My questions to you are:
- Have you ever booked a vacation without a deposit?
- Have you ever booked a hotel room without a deposit?
- Have you ever been able to book a conference room, a church, a reception hall without a deposit?
In most cases, those deposits may be non-refundable. A deposit for a purchase of a short sale is refundable under the provisions of the Purchase Contract. We ask for a “good faith” deposit as a measure of a buyers’ good faith.
The homeowners listed their home as a short sale because they want to avoid foreclosure. The sellers are unwilling to essentially take their home off the market for a buyer who is unwilling to provide a small initial deposit. My years of experience working short sales tells me that buyers who are unwilling to put up a deposit are most likely buyers who are writing offers all over town and ultimately may walk away from their promise to purchase. If that happens, my clients are at a higher risk of foreclosure.
Therefore Mr. and Mrs. Buyer (and Buyers’ agent) as Jerry Maguire says:
SHOE ME THE MONEY!
Certified San Jose Short Sale Specialist
Copyright © 2010, All Rights Reserved by Kathleen Daniels,San Jose Short Sale Specialist, RDCPro *San Jose Short Sales – Show me the Money!*