Pro’s and Con’s
It’s difficult advice to give a Buyer, but I ran into another agent recently who recommends that would-be Buyers in a short sale go ahead and deliver their earnest money check and perform their inspection — before the bank signals its OK.
Many (all?) Buyers are hesitant to do that, because if the bank does not agree to a short sale — or takes months (years?) to even respond — the Buyer is faced with moving on and flushing the cost of the inspection (typically about $350, depending on the size of the house).
The “Pro” Case
So, what’s the case for doing the inspection and delivering the earnest money check?
It improves the odds of the bank saying “Yes” (or so goes the theory).
Reducing the risk to the Buyer: they can ask the Seller to reimburse them if the bank ultimately says “no.”
It’s also the case that the Buyer’s earnest money is deposited into the trust account of the listing agent’s broker — not the bank.
So, in the event that the deal never happens, the Buyer can get their earnest money back relatively quickly (usually, about two weeks).
