"It's too small for me to bother with.....or is it?"

In Real Estate I have often heard other agents talk about a buyer in a lower price point or a low price point listing as "too small to bother with".  Also many brokers just tell people who call them on rentals that they "don't handle those". 

I have taken a bit different approach.  There are of course things I cannot do for clients I am just one person and I do need my transactions to be profitable.  And still, I often do things I have seen others avoid.  I do CMA's regularly just so people know where their values are.  I send rental listings to folks who are looking to rent and I refer them to property managers.  I work with lower price point buyers and homes ( yes I may charge a slightly higher percentage for these so I can stay in business.) When someone tells me the under $120K listing they called on is "too rich for their blood" I do not assume it's not worth persuing and just hang up.

Instead I do all I can to serve these folks.

Sometimes as I have struggled increasing the volumn in my business I ask myself if this policy is a good policy.  I do know it feels right.

Recently I observed the effect of another business taking a totally different approach from mine and the results.  My husband works for an international company.  He is often called upon to test things, design things before they are used in larger applications and so on.  With out going into details too much here is what happened.

  He contacted a local company to make an item for him to test.  They had all the materials available to do so and it is not even a difficult thing to make ( he could have made on the spot at home if he purchased one tool that the company he contacted has)  After telling him they would have it done in 2 days they then contacted him to tell him it was "far too small an order" and they would not be doing it for him.  Mind you likely they could have made it in under 15 minutes and shipped it just as easily.  His company did not even care what they were charged for it, they mostly just did not want to lose a day's work from an employee who would have to search out and buy the tool to make the item and the supplies.

Ok, so they saved themselves maybe 20 minutes of labor.  What did they lose?  Well....the vendor my husband was working with that needed to have the part tested for his company's application is also a multinational company.  If the part worked well, my husband would have recommended that the vendor get their supply of this item from the company locally.  Literally 1000's of the item would have been part of their first order and the orders would have been ongoing.

I think doing the 20 minutes of work on the spot would have been worthwhile, if they felt that would not work they still would have had the new account by supplying and mailing it to my husband.  However they did neither.  Wonder just how much in marketing they will have to pay to make up for that lost order.

So....the next time someone asks for something small, why not do it.  Don't expect anything in return ( except your pay if applicable) and see what happens.  My largest commission checks have been the results of referrals and contacts made doing small things.

Oh, and if you as a client have something small for me or large, I will give it my best. Even if it's "tiny",

if it is something I am not the best person to do, or I am not in a position to do it, I'll find you someone who can.  I just ask that you refer me when someone else you know ( and like) needs the same level of service.

Looking forward to meeting you soon!

First time home buyer series- What happens to my earnest money?

From Anna Matsunaga, Team Momentum, Keller Williams Realty Tacoma  253 212 1252

Ok, so you have decided to buy a home.

  You have an appropriate amount of earnest money.  You have a loan approval ( I will have another blog outlining this step soon).  Now you are shopping for your new home and you are curious WHAT happens with your earnest money.

For the purposes of this blog I will be sharing what happens with it here in Washington state, likely proceedures are similar in most states.

So here are some things to remember:

1. You really DO need the money to be in the account when you write a check since the check WILL be cashed.  ( many of you today do not have checks at all and will use a money order and that is fine too)

2.  The earnest money can be made out payable to 1 of 2 institutions. 
        A. The chosen Escrow company ( closer)
        B. The Brokerage representing the seller.

3. The check will be deposited with escrow ( or with the listing broker) ususally with in 48 business hours of the time there is mutual acceptance of your offer.

4. You will need to give the actual check to your agent to hold until mutual acceptance is reached.

5. Your agent will deliver the check to escrow or the listing firm as specified in your offer.

6.  You CAN get your earnest money back.....ususally
         A. You must have a legal excuse for not completing the sale ( ie the house fails inspection or your financing fails in order to get the earnest money back)
         B. Even IF you have a legal excuse, in most cases to get the money back both parties must sign paperwork releasing you from the contract in order for you to get the money back.
         C. IF for some reason the other party does not want to release your money AND you have the legal right to it, it will go into what is called "interpleader action" where a neutral party makes the descions regarding returning the money to the rightful owner.  If that is YOU, you will get your money back, minus the cost of the interpleader.
         D. IF you just get cold feet and change your mind with no legal excuse, you will have relieved yourself of the earnest money. ( and keep in mind a buyer has quite a few legal reasons why they may be allowed to leave the contract)

7. You can write a promissory note instead of a check for your earnest money.  This can be convenient if you do not have checks, or if delivering the check to your agent is a challenge for any reason.  IF this is the case the earnest money still MUST be deposited by the deadlines with in the offer agreement.  If you choose to use a promissory note, your realtor will prepare it for you.

8.  Some sellers have rules regarding the earnest money.
        A. Some require a certain amount or percentage of the purchase price of the home.
        B. Some require that you use their choice of escrow and you must write the check out in that manner.
        C. Some will only take a cashiers check and some require that check to be drawn from a larger national bank, or to be a Postal money order only.

9. Your realtor MAY be able to negotiate regarding earnest money.  There are a number of things you might want negotiated on your behalf.  One of these things would be not having to deposit it until after inspection and successful negotiation of the contingency is completed.  ( there are several other things you might want to negotiate and this is a subject of another blog.)

10. Your earnest money is applied to the purchase of your home.  If you are putting money as downpayment ( and almost everyone does) it will be a part of that.  If you are paying your own closing costs, it could go towards that.  What ever money you need to bring to the table to close, the earnest money will count towards part of that.  IF you do not need to bring anything ( perhaps a no money down VA loan, and the seller pays closing?) then you will actually walk away from the table with your earnest money in your pocket.

This is just a basic overview of Earnest Money to help you understand it.  Be sure you speak with your realtor more about questions you may have regarding your exact circumstances.  Realtors actually invest  time and take classes that are about nothing other than earnest money and still likely always have more that they can learn too. 


Look for more topics soon, like....what things might I want my realtor to negotiate regarding my earnest money? What exactly are closing costs?  What is the difference between a loan qualification and a loan approval?  Why get approved before shopping and more.

First time home buyer series. How much earnest money do I need?

So you've decided to buy a house.  You know what earnest money is, so your next question is, how much do I need?

There is no set answer.  The reality is if a seller would agree your earnest money could be nothing at all of $1.  However, few sellers are going to feel comfortable taking their home off of the market if you don't have any skin in the game so, what should you offer?

Your Realtor may have suggestions on the customs in your exact area if you are in a different state than I practice.  Here in Washington it is fairly common to make earnest money be 1% of the purchase price of the home.  So the amount will depend on the price of the home you are buying.  a $100K home would be $1000 in earnest money with this formula.  For a $250K home would be $2500 would required.  Does this mean you must follow this rule?  Does it mean you should never offer more or less?

No.  This is just one way to do it.  Again earnest money is what ever you agree to ( and area able to) give and what the seller will accept.  I have written offers with as little as $100 in earnest money.  Problem is it's hard for a seller to think you are serious if you are only willing to risk less than you likely  spend on a trip to the grocery store.  My opinion $500 is your bare minimum.   I have had many offers go through where this was the earnest money amount.  Most sellers are more comfortable with at least $1000.  I urge my clients to give at least that much unless there is no way that they can.  In most cases however, you might want to save for a bit if you are having a hard time coming up with $1000.

Are there times where you should offer more earnest money?  Yes.  For one thing if you can come up with it and you make an offer and the seller counters asking for more earnest money and you want the house then it may be a good idea, depending on the other terms of the offer.  ( of course if you are my client I will help you walk through how this should be handled)  Another time to offer higher earnest money is when you know you have a pretty good chance that you are competing with another offer.  Perhaps the only thing that makes your offer stronger is the earnest money and if you are in a position to offer more then it would be a smart move.

From Anna Matsunaga, Team Momentum, Keller Williams Realty Tacoma
253 212 1252

First time home buyer questions-What is earnest money?

If you are a first time home buyer the whole process of buying a house is....well rather intimidating and complicated.  Heck, I've been a Realtor(r) for a decade and I still have to say it's rather complicated.  That is why my clients need me.

One of the things that can be overwhelming for a first time buyer is the simple fact that there are many terms that they don't understand.  So If you are thinking about buying a home, pull up chair, in the next few posts I am going to define terms so you are clear about the process and what it means to you.

Today's topic, Earnest Money.

First off what is it?  Earnest Money is just that, money that you put up to show you are earnest.  You really do want this home and you are willing to risk that money if you were to decide not to buy the home you are making an offer on.  Does this mean that the money is just gone?  NO.  This means that unless you have legal excuse you do not get this money back if you decide not to buy the house.

So what reasons could you have to not buy the house and still get your money back?  That will depend upon how your offer is written.  Some common things that make it so that you still get your money back even if you don't buy are: The house fails inspection, The neighborhood does not pass a neighborhood review, or financing fails.  There are plenty of other possibilities and the 3 proceeding are likely the most common.  These are call Contingencies.  This means that you buying the home is contingent upon these things working out.  ( ie the house passes inspection, your financing goes through and so on)  Any good offer for a first time buyer will have contingencies of some sort to protect you and your earnest money.

Next post will answer the question- how much earnest money do I need?


From Anna Matsunaga, Team Momentum, Keller Williams Tacoma

253 212 1252