Andy Ogorzaly, Real Estate Pro in Wicker Park, Chicago,...

Since initial earnest isn't set in stone, what amount do you usually recommend?

Asked by Andy Ogorzaly, Wicker Park, Chicago, IL Tue Aug 21, 2012

1%, $1000? Do you recommend more if it's a low ball offer? And what about high end listings?

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10
$1k minimum with a range of 1-3% above $50k depending on how serious you want to appear to the sellers.
0 votes Thank Flag Link Tue Aug 21, 2012
For initial earnest money, I recommend anywhere from $1,000 to $5,000, depending on the price of the property and the level of interest from other buyers. But I always recommend increasing the final earnest money to a fairly substantial percentage, to demonstrate financial strength and sincere interest. Hope that helps.
0 votes Thank Flag Link Tue Aug 21, 2012
The usual here is that $1,000 accompanies the original offer with the balance of what would be 10% of the purchase price due on or shortly after the inspection conntingency is met. I've rec'd offers on behalf of my sellers where the buyer's agent is looking for the seller to accept 5% total in escrow. I advise my seller's not to accept those terms as it is too easy for a buyer to walk away from, say, $5000 instead of $10,000 should there be any buyer's remourse!

Depending on the offer, its terms, & type of sale (short sales & some foreclosures) I usually don't have a problem with that initial $1000 escrow to be remitted "upon acceptance."
0 votes Thank Flag Link Tue Aug 21, 2012
5% is all that I would accept
0 votes Thank Flag Link Tue Aug 21, 2012
Hi Andy,

It depends on the deal, typically $1000 - $5000 for initial EM and $5000 to 10% for total EM. The more EM the stronger your offer will look compared to other offers.

Best of luck,
Ivan Sagel
312-515-7823
0 votes Thank Flag Link Tue Aug 21, 2012
1-2% is common here but the homes range in price from $300k to millions.

Low ball offers don't need to come in with huge amounts of earnest money, it just shows the seller they have money but are unwilling to spend it.
0 votes Thank Flag Link Tue Aug 21, 2012
A larger deposit is highly recommended - especially if its a low ball offer -
A larger amount will strengthen your offer. This will show sellers you are motivated and have strong intentions. 5% can be a good benchmark
Good luck with your offers!
Sam Sharp
Senior VP of Mortgage Lending
Guaranteed Rate
773 290 0455
0 votes Thank Flag Link Tue Aug 21, 2012
Hey Andy!
It depends on what message you want to send to the seller with your offer. If you want to make sure they know you're serious about buying, you'll set your number higher, at around 2 or 2.5%. If you're dealing with an institution you can make as low as you can get away with, while keeping a semblance of seriousness. I've had offers accepted with $500. But they were low price, short sales.
0 votes Thank Flag Link Tue Aug 21, 2012
I typically do about 1% but the other side always wants more. Use your best judgement depending on the purchase price.
0 votes Thank Flag Link Tue Aug 21, 2012
It does depend on the price of the property and more can help if you want to show a strong offer. The standard contract shows 10%, but it has been many years since I ever used that much regardless of the price.
0 votes Thank Flag Link Tue Aug 21, 2012
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