Learn how to protect your interests when you’re selling your home.
When you put your house on the market and receive an offer, one of the most common questions is, “When do I get my money?” Understanding the transaction process, especially the role of earnest money, is crucial in ensuring a secure and successful sale.
Let me share a recent experience with a property we listed for $1.4 million. After just 24 hours on the market, we received an offer that escalated $150,000 above the asking price. While the initial excitement of a high offer can be tempting, it’s vital to consider the security and reliability of that offer.
One key aspect of securing the transaction is ensuring that the buyer is committed beyond the offer price. In this case, we made sure the buyer not only had a significant down payment but also enough additional funds to cover any potential shortfall between the appraisal value and the offer amount. This contractual protection ensures that the buyer is fully committed to the purchase, reducing the risk of renegotiation or backing out.
“A strong offer is more than just a high price; it’s about commitment and security.”
If you decide to accept an offer before the scheduled review date, it’s important to evaluate how solid the offer is. Ideally, the buyer should waive contingencies such as home inspections and financing. In this particular case, the buyer waived all contingencies and even offered $100,000 in earnest money that was non-refundable once deposited into escrow. This provided an additional layer of security for the seller, ensuring that if the buyer backed out, the seller would still be compensated.
Despite the strong commitment, the buyer later attempted to back out of the deal, but with the $100,000 earnest money at stake and clear contractual obligations, they had no legal grounds to retract the offer without forfeiting the deposit. After some tense negotiations, the transaction was successfully completed, with the seller receiving the full earnest money and the property closing as planned, underscoring the importance of protecting your interests in real estate transactions. As a seller, securing your position with strong contractual agreements and being prepared for potential buyer remorse or emotional decision-making is essential.
In real estate, securing the transaction means more than just accepting an offer—it means protecting your client’s best interests and ensuring that every step of the process is handled with professionalism and care. If you’re thinking of selling your home, allow us to help you by calling at (425) 651-4200. I look forward to hearing from you!