I wanted to poll my Active Rain friends for some ideas which are percolating in my mind regarding earnest money deposits. In order to protect sellers, do you have certain requirements regarding the amount of earnest money you would advise your sellers to require with the signing of an agreement of sale?
I know. It depends.
It depends on the financing situation. But even in an FHA deal, the buyer needs to prove 3.5% of purchase price, so I am beginning to ask for at least 2% of purchase price for the earnest money deposit. What if it is a cash deal? What would you expect?
I also know the variables of how sweet the rest of the deal is. Settlement day, price, inspections and the motivation level of the seller. But even with these factors, requiring the buyer to place a sizeable earnest money deposit seems like a basic and important point of negotiations between buyer and seller.
What thoughts do you have regarding this matter?
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