In my area, it is customary and usual for the buyer to put down 10% as a good faith deposit. Can I, as an agent, "demand" it...........no, but I can ask for it as a representative of the seller. I can ask - I don't demand.
Now..........and this is a big "now"..........if the total down payment is less than 10%, as in your case, then certainly we don't expect the buyer to come up with more money than that amount. I did have 1 time when the buyer was putting down 5% as a toal down patment, but did bring in 10% (which they had) as a good faith deposit.........the additional 5% was credited back to them at closing, and went towards their closing costs. The addional amount down gave the seller a bigger sense of security.This only happened once in my experience.
So.........if you are putting down 3.5%........then that's the amount I, as an agent, would expcet to see as your earnest money deposit.
Just tell the agent you don't have 10%.....and you are doing the best you can.
If you do have any additional money, and this becomes a sticking point to the purchase, then you can offer a bit more, and have it credited back to you, as I described above.
Either way, I'd speak to an attorney to firm this up.
Hope this helps.
Prudential NJ Properties
Top Five Reasons for this 'Money Talks' requirement are:
- The seller had a nightmare experience with a buyer who put down less -and now after months of negotiating and thinking they had a sale - they're back on the market - the Seller Is Gun $hy
- Your credit score is not stellar - which means you're a higher risk - and the Lenders wants rea$$urance.
- You're making a very low offer - we call this "bottom feeding" - so the seller, the lender and the realtor want to make $ure You Finally Close on the deal
- The Seller's attorney may be insisting for any reason at all unbeknownst to any one but the attorney and the seller
- The price of the property may be under say, $200,000 - and potential buyers have been known to walk away from the contract - willing to lose the down payment - so a larger down payment makes you stick like glue to your deal.
POSSIBLE WORKAROUND - A payment schedule for the total downpayment amount - pay out in blocks, within a specific schedule prior to closing - I'm doing this currently on one of my transactions.
Good luck - Meredith Kurz
In today's market I have seen sellers require many things, one of the ways around this is to have your attorney involved. I would strongly urge you to have your attorney contact the sellers attorney to discuss this. Since the attorney is the person who will be collecting the deposit to put into escrow once a contract is signed. Since you do not have an agent representing you, your attorney is the only person who should be involved.
Sounds like you are dealing with someone who needs to retire !
A lot of people, including Realtors, do not understand the new FHA and how it differs from days gone by.
If your concern about a buying agent is that you must pay them, that should not be a concern. The selling agent pays the buying agent out of the commission negotiated with the seller...but you will at least have someone representing your interests.
I know you don't want to hear that, but apparently you need to.
The Realtor can't unilaterally demand it.
However, if the seller specified that he/she will only consider offers accompanied by a 10% deposit/earnest money deposit, then that agent (I'm assuming it's the listing agent) is restricted by what the seller has specified.
Ask the Realtor (or get clarification) for the basis of that 10% demand. Then proceed accordingly.
Hope that helps.
The realtor can't demand a thing but the seller's can demand whatever they want.
I know you say you don't want a buyer's agent but the fact that you are asking this question on Trulia indicates why it is to your advantage to have one.
Make an offer. Unless they have people beating down the doors, the seller's may reconsider.
The listing agent legally has to present all offers.