From My Experience: The Not-So-Earnest Money

Dealing with a "double agent" led this seller to financial intrigue. Here's why you should think twice before letting a real estate agent represent both you and the buyer.
By: Tammy Stoner

Due to the frightening house market in California, we agreed to allow our real estate agent to "double agent" --- that is, to represent the buyer as well as us, the seller. After having our house on the market for a year and making vertigo-inspiring drops in our asking price, the real estate agent brought us a serious offer and in the nick of time. We needed to move to a new city in one month. She was our hero --- for a while.

We moved and were confident that even though we had no jobs lined up in the new city we would have enough cash from the house sale to relax and look around for a while.

Then our agent called. Our buyer had run into trouble; her loan was denied. So, while they worked through that issue, our sale was put on hold.

Making matters worse, our buyer was refusing to sign off on releasing the earnest money (the down payment she'd made on the house). This did not sound very earnest. Our double agent explained that the money wasn't guaranteed until all contingencies (in this case, the sale of our buyer's home) were lifted. So much for the deposit guaranteeing anything.

We eventually made the sale and got our money. But I've learned you can include in your counteroffer a clause requiring the release of earnest money whether your buyer's home sells or not. You can add an option allowing you, the seller, to rent your home to the buyer while the buyer works on selling his home. That way you get money while you wait on the deal to go through. Who knew!

The lesson of this tale is threefold: One, don't split your agent's loyalty; two, don't move before your deal is finalized; and three, know the contingencies of the deal better than you know your cat.

Next Up

Brokers, Lenders and Points, Oh My!

Brokers can be the used car salesman of the mortgage world because they get a cut of the amount you borrow.

From My Experience: Beware the ARM!

A few years ago I had become a house flipper by accident, because a few life changes forced me to sell three houses in five years. Read on and learn from my mistakes to avoid going into debt.

Get My Agent on the Phone

Especially for first-time homebuyers, using a seasoned agent is a smart move.

Homeowner Tax Tip: How to Take More Money Home

The tax advantages of homeownership can help you bring home more money every month and afford a larger mortgage (read: better house) than you may think.

My Landlord Experience: The Exorcism

Being a landlord comes with a lot of grief. Writer Tammy Stoner tells about the time ghost-fearing, beer-drinking artists moved into her historic home.

How Much for My House?

Try betting on more price choices for the buyer

When They Say No: Finding Mortgage Money

Lending guidelines have tightened, but getting a loan is still possible.

How Much Is My House Worth?

How to determine your home’s value in a choppy market.

How Soon Can I Sell My Home?

Is flipping your house a good idea? Here's what you need to know.

Did I Accept a Bad Offer on My Home?

Worried you accepted a bad offer for your home? Let real estate expert Tara-Nicholle Nelson soothe your fears.

On TV

Flip or Flop

12pm | 11c

Flip or Flop

12:30pm | 11:30c

Flip or Flop

1pm | 12c

Flip or Flop

1:30pm | 12:30c

Flip or Flop

2:30pm | 1:30c

Flip or Flop

3:30pm | 2:30c

Flip or Flop

4:30pm | 3:30c

Flip or Flop

5:30pm | 4:30c

Flip or Flop

6:30pm | 5:30c

Flip or Flop

7:30pm | 6:30c
Tonight
Tonight

Flip or Flop

8pm | 7c

Flip or Flop

8:30pm | 7:30c

Flip or Flop

9:30pm | 8:30c

House Hunters

10pm | 9c

Flip or Flop

11:30pm | 10:30c

Flip or Flop

12am | 11c

Flip or Flop

12:30am | 11:30c

House Hunters

1am | 12c

Flip or Flop

2:30am | 1:30c

Flip or Flop

3:30am | 2:30c

Shop This Look

Found a living space you love in HGTV's Photo Library? Get the look in your own home with products from Wayfair.

Follow Us Everywhere

Join the party! Don't miss HGTV in your favorite social media feeds.