Profile picture for Lia C

how long can the agent hold on to your earnest money since s short sale responds could be 3-6 months

I'm putting on offer on a short sale home and i understand that the bank can take up to 3-6 months in letting you know if they accept or not. I'm giving the agent  the letter from my finacial company stating that i have the money but yet the agent said the bank wants earnest money too. Can the bank hold your earnest money for 3-6months
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 03 2009 - Bailey
We think we've answered this question for you!
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
 
 

Answers (4)

Use the 'alternative earnest money deadline' and have it read 3 days plus SSA  - which translated means that you'll deliver the earnest money to them 3 days after the bank has issued 'Short Sale Acceptance'.  Good luck.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
March 17 2011
Your offer should include the Colorado Real Estate Commission form,  Closing Instructions, which specifies who holds earnest money, along with instructions for how it is to be applied in case of failure to close or in the event of a dispute.

Here is a link to the Real Estate Commission Closing Instructions Form. Pay particular attention to paragraphs 8 & 9. Also be aware that any additional or qualifying instructions may be placed in paragraph 13, Additional Provisions.

When presenting offers for my buyers I normally recommend not providing earnest money until the offer has been accepted, using the Alternative Earnest Money Deadline provision of the contract. I may ask the buyer to provide a check which is held by my brokerage until acceptance. Then I provide the seller and their agent with a copy of the check so that they can see that my buyer is serious and ready to provide the earnest money when appropriate (For Short Sales it should be specified that 'acceptance' is contingent upon all lenders accepting the terms of the offer).

This way the buyer makes a commitment but is not at the mercy of parties not having their best interest at heart if there are problems. Since my brokerage holds the earnest money, if problems arise they can return the funds to the buyer, at their discretion & always looking out for the best interest of the buyers.

If the lender insists on having earnest money prior to their acceptance of the offer, which I have never had happen, it is up to the buyer to decide whether they will accept this demand or withdraw their offer. If they decide to accept this stipulation and provide earnest money prior to lender acceptance, they will want to be certain that they understand exactly what their rights are with regard to return of their funds if the lender does not respond to the offer in a timely manner or other situations which might result in termination. Their Buyer Agent can be a great resource if/when this happens.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
December 06 2010
Alisa Hagner is always on target with her answers. Thanks.

Typically, the broker should have the money in escrow and it can not be released unless both parties agree to the terms of the release. If there is no agreement, it must be arbitrated and if there is still no agreement, it may be taken to court.

On a short-sale however, the calendar typically lapses causing a seller breach of offer terms and may therefore create a good cause for releasing the earnest money upon the buyer's request.

To get the earnest money back, the buyer simply needs to formulate the argument on legal grounds founded in the contract. Each contract is different, so read the terms to find an "escape" if you are seeking to get your money back.

For Lia C, you should pay particularly close attention to the calendar items, like inspection objection deadlines, loan commitment deadlines. Those are common escapes. If you want to extend the offer, be sure to extend these objection deadlines.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 03 2009
You specify who hold the earnest money in your offer.  The seller's lender does not hold it.  

You could offer a Promissory Note due the day after the short sale is approved.  Or you could use the Alternative Earnest Money Deadline. 

Your earnest money would be held until you or the seller terminate the contract, per the Short Sale Addendum.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
November 03 2009
 
Related Questions
how long can the agent hold on to your earnest money since s short sale responds could be 3-6 months
Profile picture for Alan Strange
Latest answer by Alan Strange
March 17 2011 | 4 answers
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 1551 Mockingbird Trl, Bailey, CO Home For Sale
    1551 Mockingbird Trl, Bailey, CO 80421

     For Sale: $289,000

    • Beds: 4
    • Sqft: 2184
    • Baths: 2.0
    • Lot: 53578
  2. 303 Timbertop Rd, Bailey, CO Home For Sale
    303 Timbertop Rd, Bailey, CO 80421

     For Sale: $210,000

    • Beds: 3
    • Sqft: 1036
    • Baths: 2.0
    • Lot: 32670
  3. 150 Pinon Rd, Bailey, CO Home For Sale
    150 Pinon Rd, Bailey, CO 80421

     For Sale: $259,900

    • Beds: 4
    • Sqft: 2156
    • Baths: 2.0
    • Lot: 30492