Bank wants a $3k nonrefundable deposit?

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Submitted by pabloesqobar on August 14, 2009 - 10:05pm

I am looking at an investment property, all cash deal, through the Bank that owns it. I found it on sdlookup. I was contacted and told that the Bank insists on a $3,000 deposit, which is nonrefundable. Doesn't matter why it doesn't close, whether it was an undisclosed crack slab, whatever. If it closes, the $3k is credited towards the sale price.

I told the agent this wasn't acceptable and nobody in their right mind would agree to that. When she confirmed that I realized the location, and that it was an all cash deal, she said she would contact the other agent and find out what the deal is and if they'll get rid of that b.s. clause.

Anyone ever heard of a $3000 cover charge for the privilege of making an offer on a bank owned property?

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Sounds hinky, I made about a
Submitted by temeculaguy on August 14, 2009 - 11:00pm.

Sounds hinky, I made about a half dozen offers on bank owned in the last year and they always wanted 3k that was conditionally non refundable. In each case, the only way they kept the money was if i got cold feet, all other situations I would be refunded and was refunded a few times (usually because I was outbid). In one case, the property wasn't unoccupied yet, current occupant stripped the place before leaving and while i was in escrow, that got me out of the deal and my deposit back (10k worth of plantation shutters, light fixtures, appliances, etc.) I wanted a new price, they said no, i said FU, they gave me back my money.

I don't think I'd sign a completely unconditional deposit, what if it burns down before escrow closes? You can't insure it until it closes, that would cause you to eat the deposit, that blows.

I wonder if the listing agent
Submitted by AK on August 15, 2009 - 9:36am.

I wonder if the listing agent is trying to scare off people in favor of his/her own buyers ...

A few months ago I passed on a nice little house that was offered on similarly unfavorable terms. Listing agent said the bank insisted on a 3% deposit, 5 day inspection period, 15 day escrow. It closed recently about 6% below what I'd call fair market value.

Appreciate the input. I
Submitted by pabloesqobar on August 15, 2009 - 10:14am.

Appreciate the input. I guess my only option is to wait for the agent to get back to me. Just seems like a fairly onerous term, and one that's not necessary to get the place sold. Almost seems like they are intentionally trying to discourage buyers.

You just have to get an
Submitted by recordsclerk on August 15, 2009 - 11:33pm.

You just have to get an inspection done before bidding. This is probably why the price got your attention in the first place. Since you are paying all cash there are no reasons to back out of the deal anyway.

AK wrote:I wonder if the
Submitted by mwtosd on August 16, 2009 - 7:20am.

AK wrote:
I wonder if the listing agent is trying to scare off people in favor of his/her own buyers ...

Maybe call the bank directly and see if there truly is a $3,000 non-refundable deposit, just in case the agent is saying that (to favor one of their buyers) but the bank has different terms.

Thanks again. It's now a
Submitted by pabloesqobar on August 16, 2009 - 9:12am.

Thanks again. It's now a moot point.

I just heard back from my friend who owns a unit in that complex and was the HOA president for a bit. That particular building has major foundation issues. I'll steer clear of it. Cheers.

pabloesqobar wrote:Thanks
Submitted by AK on August 16, 2009 - 10:33am.

pabloesqobar wrote:
Thanks again. It's now a moot point.

I just heard back from my friend who owns a unit in that complex and was the HOA president for a bit. That particular building has major foundation issues. I'll steer clear of it. Cheers.

Great research job. Sellers, don't mess with Pablo! :)