William, Home Buyer in Daly City, CA

San Francisco, Daly City, Brisbane: What is the norm for earnest money in today's market?

Asked by William, Daly City, CA Thu Mar 8, 2012

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Earnest money is negotiable. You can usually put $1 to 3% of the purchase price, depends on how strong you would like to make your offer. 3% is usually the max someone will use because there is usually a "liquidated damages" clause on most California contracts that state that 3% is the maximum amount that the seller can retain if the buyer fails to complete the purchase of the property because of buyer's default. However, you can put down more than 3% in certain scenarios to make your offer stronger. Or, in some probate sale scenarios, a 10% earnest money is required. Hope this helps!
2 votes Thank Flag Link Thu Mar 8, 2012
As others have pointed out, 3% of the purchase price is standard, but negotiable. Sometimes you put up less and then increase it to 3% after releasing contingencies, but this is going to be less attractive to a seller because you will appear less committed to closing the deal.

Best Regards,

Lance King/Owner-Managing Broker
lance@fixedrateproperties.com
415.722.5549
DRE# 01384425
1 vote Thank Flag Link Fri Mar 9, 2012
I stress that a minimum of 3% for a buyer, if they can do more then I would encourage them to place more down to show a strong position (but only if the seller agrees to the liquidated damaged clause which limits the buyer to 3%).
0 votes Thank Flag Link Fri Mar 9, 2012
3% percent of the purchase price is typical in the Bay Area. Sometimes buyers can start with $1,000 and then increase to 3% upon approval of inspections.
0 votes Thank Flag Link Fri Mar 9, 2012
Once escrow is opened 3% should be deposited within a few days. If the listing agent doesn't insist on it then it can be anything.
0 votes Thank Flag Link Fri Mar 9, 2012
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
3% is standard throughout the San Francisco bay area. If you write an offer with less than a 3% earnest deposit, the listing agent will in almost every case ask your agent to increase that amount to 3% anyway, so why not save everyone the time and trouble and make your offer strong and appealing by just putting up the standard 3%?
0 votes Thank Flag Link Thu Mar 8, 2012
it supposed to by 3% of the purchase price. But, i always suggest to my buyers to place at least 5% down to show to seller that we are serious by placing more money down. The earnest money will stay in escrow and it is safe as long as we have not removed all contingencies any way.

I would love to write a nice/winning offer for you if you are ready...

Manzar D. Azari, MBA, Broker, Realtor
Founder/President
The Azari Group Real Estate, Inc.
http://www.theazarigroup.com
0 votes Thank Flag Link Thu Mar 8, 2012
I always try to get my Buyers to make their Earnest Money at least 1 percent of the purchase price.
0 votes Thank Flag Link Thu Mar 8, 2012
3% is standard. An experienced agent will explain various ways to offer the deposit to help protect you.
0 votes Thank Flag Link Thu Mar 8, 2012
Depends on the price of the home. In my area it seems like homes priced $100,000 or less will ask $500-$1,000 for earnest money. Most homes above that ask for $1,000 in earnest money. The homes over $300,000 will be asking more. Earnest money is negotiable.

Good Luck,
Christine
0 votes Thank Flag Link Thu Mar 8, 2012
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