Wanna Be A Baller, Shot Caller…Make a Big Deposit & You’ll Call the Shots in your Deal
Be the “Shot Caller” of your real estate deal by making a big deposit with your offer! This is a winning move for the Buyer because most deposits are refundable and a big deposit makes a big impression on the Seller, especially in this market where many deals don’t close.
Plunking down a big deposit tells the Seller, “Hey look at all those zeros in my deposit, I can close, you don’t have to worry about me backing out of the deal because I can’t get financing!” The Seller starts fantasizing about taking all those zeros to the bank.
Small deposits work against a buyer because they give the Seller a bad impression. The Seller thinks a buyer with a small deposit isn’t serious, is weak, can’t close and will waste time tying up the property.
Last night I was at a cocktail party a guy who was serious and has cash told me he’d been making offers all over town and they were all rejected. “How much was your deposit,” I asked… “Five Percent” he said. Well, there was the answer, this guy had cash power, but missed the opportunity to use it in a meaningful way to negotiate the deal to his advantage…
His 5% deposit sabotaged his real goal of getting the property at a low price because it undermined the Seller’s confidence that he could close. It makes the Seller think he was a wanna-be who needed time to get the cash together.
Imagine if he made a deposit of 25% or 50% ? In this economy, it would be hard for the to say “No, I’ll wait for the next offer with a 50% deposit to come around.”
The smart Buyer will do this. He knows he can get the deposit back because he read his contract and the deposit is fully refundable at the end of the due diligence period. The Buyer also knows that making a big deposit has such a big emotional impact on the Seller that the Buyer may be able to get the property for a lower purchase price. A lower purchase price would be lower taxes!
So, if you wanna call the shots in your next real estate deal, come in like a “Baller” and make a large deposit accompanied by a proof of funds.
I want all my followers and Buyers to be smart “Shot Callers” in their real estate deals!
If you have questions please feel free to contact me!