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How much should a good faith deposit be?

By Brian Woodring

Real Estate Agent with Keene Company Realtors

January 27, 2011 10:52 PM

I have had a few debates over this and I haven't been in the market very long. "5 deals under my belt and a year has passed. " The average house sale where I am is probably around $120,000 and it seems everyone is ranging from $500 to 1% of the purchase price. So far two of the offers I've written has been with a $100 deposit. Why? Well it's all the buyer could afford at the time. Luckily both offers have gone through and everything has been fine.

Which begs the question, if I don't have to do a $1000 deposit, why should we? That, I'm going leave open for discussion. I mean they can always counter offer wanting a bigger deposit check, right? The good faith deposit is supposed to the show the seller that we are serious about buying the home. When the house we're looking at is below $100,000 and the type of loan is a government assistant loan so that they don't have to come through with a big chunk of the down payment. $100 to these guys is a lot of money.

Where does everyone stand on this issue and what seems to be the run of the mill figure/idea??

Thanks!

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Robert Amato

Bob Amato of Empire Home Mortgage Inc - East Meadow, NY

Brian,

Although I am a Mortgage Professional, I know that everything is a negotiation and that you might be able to put down only a thou. But you need to look at it from a seller's point of view. They will not want to tie up their house they are trying to sell if you do not have any skin in the game. Here in NY, most sellers put down at least 10%.

Jan 27, 2011 11:02 PM

Jim Palmer

Chipola Realty - Chipley Office (850) 638-2777 - Sunny Hills, FL

Washington County, Florida

There is no hard and fast rule of course to the size of the binder deposit. What I normally tell the buyers is to put up enough to show the sellers that you are indeed serious about this offer, but not more than you would be willing to lose if you back out of the deal.

Should be interesting to see what kind of comments you receive.

Jan 27, 2011 11:05 PM

Brian Woodring

Keene Company Realtors - Louisville, KY

Bob - I agree, I'm just still at a point in my life where $500 is a lot of money and I couldn't imagine loosing it by walking away from a deal.

Jim - Agreed, I was curious what the comments might be both positive and negative :)

Jan 27, 2011 11:10 PM

Anonymous

T. Presnell

I was wondering does the good faith check you give to the realtor need to come from the buyer? My husbands parents wrote the good faith check to the realtor company and now they are saying it needs to come from us.

Thanks,

Dec 19, 2011 06:11 AM

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Brian Woodring

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