Hi, all. I’m in negotiations on a 25-space mobile home park in my area, referenced in this thread:
One of the terms of the seller’s counter to my initial offer was that they wanted EMD released to them at the conclusion of DD (DD=30 days after all requested docs have been received). The answer was a resounding “no way”, at least in my head.
I countered, and the seller has come back with the following regarding EMD: “to be released to Seller upon end of financing contingency.”
It would be absolutely insane to me to agree to release EMD to the seller at any point prior to closing, even once it has gone hard. Am I way off here? Is this ever done? In my SFR world I would tell somebody to go fly a kite if they asked for this but want to make sure I’m not off base??
@JulieK Today you have no contract. The seller is stating what he wants . If you say no, will you still get the deal? Maybe.
If its after the contingency, its money going “hard”. Its a competitive market so you have to do what your comfortable with.
I have offered an option fee on parks pretty much as good faith to pay to play and see i can get my foot in the door on a deal.
If you don’t get through finance contingency or dd, do you still have to pass through? If not , sounds like there isn’t too much risk on your side.
Maybe negotiate the amount. Or if its 10k , say you will give them 1 k regardless and 9k refundable through DD etc.
When we sold our condo complex, the offer we chose was 100k hard day 1 ( contingent on clean title and phase 1) that’s it! I image some stuff like this is happening in the MHP space.
I would say if its off market you might have some more wiggle room , on market, might be tricker due to competing offers. Good luck
Make your close date the same as the date the financing contingency ends. This might mean you have to speed up your diligence but if you have a game plan it’s doable.
@Deleted_User_ME to the best of my knowledge, there aren’t other competing offers. It’s not off-market, but I’m not sure it’s gotten a lot of visibility. Either that or it’s a bad deal and I’m just not seeing it yet But at the outset I don’t see that to be the case.
I might be ok with a small option fee, but what I can’t stomach is releasing money to the seller prior to closing - obviously it goes hard after DD/financing contingencies, whatever the gates are. But once the EMD leaves the attorney’s escrow account and goes to the seller’s bank account… let’s say - worst case scenario, I find out the owners of the 8 TOHs all moved their homes out of the park the day before closing. I know that’s far-fetched, but now instead of the attorney releasing EMD back to me based on a stip in the contract, the EM is gone. I just don’t see the wisdom in a seller ever receiving the EMD prior to closing. But, like you said, it’s all about my comfort level.
@jhutson Have you gotten sellers to agree to close date = end of financing contingency?
So upon further review… after speaking with the agent, it sounds like “releasing” in the counter was actually the EMD “going hard” - so basically non-refundable vs. leaving the escrow account and being released to the seller’s account.
I guess it was just a communication issue. Good news is… the counter also shifted to money going hard/“being released” upon completion of financing contingency.
But at the outset I don’t see that to be the case.