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  1. #1
    Join Date
    Nov 2008
    Posts
    1

    Default Commercial Real Estate, Earnest Money

    Hello everyone!

    my question is: Is there some kinda way to either delay or avoid putting up a earnest money deposit?

    basically is there some kind of lingo i can put into my contracts that would protect my earnest money deposit check setting in escrow from being cashed until some later date or when a certain event takes place and etc (thats if i even provide that), so this way it makes it look like i put up a earnest money deposit but really no money actually came out of my businesses checking acct.---------or what about using promissory notes---------

    which brings me to me next question: Is it illegal when giving an earnest money deposit check to the esrow agent or whoever, to provide a check that at that date didn't have the require funds in the bank? but you included instructions that the check couldn't be cashed until a certain date or when a certain event takes place (which then you'll have the money), sort of like your normal posted dated check

    now, i am not trying to get over on the seller in any way, its just that tieing my money up just doesn't appeal to me, plus when you have multiple commercial properties under contract you could be tieing up hundreds of thousands of dollars in earn money deposits, which is a lot of money

    (which the normal earnest money deposit amount is 1% of purchase price, and when your dealing with properties 5M and up you can see what i'm talking about)

  2. #2
    Join Date
    Sep 2005
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    Behind a Desk
    Posts
    73,775

    Default Re: Commercial Real Estate, Earnest Money

    If you can get the people on the other side of your transactions to agree to what amounts to "no money down", all the more power to you. But the whole point of holding earnest money in escrow is so that it provides security for the transaction.

    If you intentionally hand out rubber checks, with no understanding that the check won't be cashed until a later date, then yes, you could end up facing criminal charges. Understanding means you say, "Can I post-date this check" and they say "Yes".

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