Advice on accepting Ernest $ up front please!

[Lisa R.]

Hello fellow BP peeps! I am considering selling a property and taking Ernest $ up front now- BUT It will not actually close until mid-2025.  Can anyone give me some worst case scenarios besides me owing the $ back if it does not close for some reason AND if there is a way to protect myself in the purchase agreement from any worst case scenarios….

There is no mortgage or realtors involved- only real estate attorneys. No contingencies involved. Houses on property will be torn down….(by the buyer). 

Any advice is sooooo appreciated :)

Thank you,

Lisa

[Julien Jeannot]

@Lisa R.

I'd say that depends on what the attorneys have drafted up. I'd direct that question to your attorney.

There is a lot of risk using earnest $ prior to the deal closing. If they buyers back out based on one of their contingencies, you'll have to pay it back. What contingencies are in the purchase and sale agreement?

The buyers must be getting a really sweet deal if they are willing to part with cash with no returns for 1+ year. 

Given this market, you can list a house based on comps, but its not an indication of where buyers will bid the properties of up. You are also losing a year's worth of appreciation by locking in a price today. 

It is a hot market with little inventory, if there is equity in the property and you are looking for liquidity to invest, is there an option to refinance or do a HELOC?