The last thing a DFW home buyers wants to do is lose their earnest money deposit when buying a foreclosure or bank owned home.  Bank owned home selling transactions, called REO’s (Real Estate Owned), are typically handled differently than most regular DFW real estate transactions.  To make things even more fascinating, there is very small conformity among these banks as to how each sale is handled. There is a common thread among these REO and foreclosure sales.  It is a tightening of how earnest money deposits are handled for these types of  REO/Foreclosure transactions.

Most regular real estate transactions in the DFW Metroplex are handled in a similar manner. A buyer makes the earnest money deposit check payable to escrow or title company.  This deposit is refundable to the buyer pursuant to the terms and conditions of the sales contract.  That is not to say, that the earnest money deposit is automatically returned to the buyer because a term or condition of the contract of sale has not been met.  The escrow deposits cannot, in most cases, be released until a release is signed by both parties. Sometimes disputes arise, and that can delay the release of the escrow funds.  Banks don’t want to get halfway through the escrow process only to learn that the buyer wasn’t serious about buying the home.  Therefore, banks want to limit the cancellations and will make demands during the negotiation stages of the contract. Here are tips for dealing with DFW REO lenders:

Make the Earnest Money Deposit Payable to Title Company.

Funds Must Be in the Buyer’s Account to Cover the Check.

Prepare to Replace the Earnest Money Deposit with a Cashier’s Check Upon Offer Acceptance.

Be Ready to Immediately Overnight the Earnest Money Deposit to the Bank’s Designated Title or Escrow Company.

Negotiate Earnest Money Deposits Below the Maximum for Small Claims Court.

Time Your Negotiations for Non-Refundable Earnest Money Deposits.

Because some of these DFW REO banks will make your earnest money deposit non-refundable, especially on these DFW foreclosures, you may want to schedule your home inspection upon verbal acceptance of your offer. You may have less than 24 hours to get these vital inspections completed.  Line up your inspections ahead of time and be ready to go the minute your DFW Realtor tells you the offer will be accepted. This way, you will have your inspections completed before you deliver that earnest money deposit. It will save you a lot of grief and worry if you know that you certainly want to proceed with the transaction before handing over your money.  You can find fantastic home values with these types of DFW real estate transactions.

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Tagged as: Bankowned, Deposits, Earnest, Homes, Money