Buyers will occasionally face temporary liquidity which prevents them from tying up and securing a property with a contract. Some of the reasons might include the following:
Buyer is waiting for cash proceeds from the sale of another property.
Committed capital from a private equity firm or investors may not be available
until the sponsor locks up
the deal first with his own capital.
Opportunistic investors considering accepting higher offers for their contract, in
order to tie up a deal and
flip it for a profit.
Liquid capital is currently tied up in other deals.
This earnest money deposit program gives buyers the control they need to compete in today’s fiercely competitive real estate market without the risk of losing a deal due to a temporary lack of liquidity. It is structured as a real estate option similar to a stock option, giving the buyer the right, but not the obligation, to buy (call) the property at an agreed upon price within the due diligence period.
This program requires a minimum earnest deposit of $500K.