Home Buying in New York>Question Details

Thatboyjack, Home Buyer in Mastic Beach, NY

In New York State, 3 real estate lawyers are telling me that there is no such thing as an "Earnest Money Deposit".

Asked by Thatboyjack, Mastic Beach, NY Fri May 10, 2013

I'm being told that I MUST provide a down payment, even though I'm receiving 100% financing (VA Loan). How can I put money up to show the seller I am serious and that this monies will be liquidated damages in the event that I default, and I can still receive/ be refunded this money back at closing (I'll more than likely use it to pay some of my closing costs). The contract already has a provision for a 4% concession from the seller. I do not want to put my deposit towards the purchase price. I need input from NYS real estate pro's. Thank you.

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Answers

2
Martina Ryan’s answer
An earnest money deposit (good Faith Deposit) is submitted with the offer & is usually refunded to you after the contract is closed if you are getting 100% financing. It really is just to show you are a serious buyer & not just making offers that you will not execute.
0 votes Thank Flag Link Sun May 12, 2013
That Boy Jack,

Be sure that there is no confusion between Earnest Money Deposit and Good Faith Deposit. I have found that Realtors in different areas use different terms.

Good Faith Deposit is generally provided with the offer and in downstate (Long Island), we generally do not collect this.

A down payment is generally provided in two parts; an amount at contract signing and the remainder at closing, along with the mortgage.

The definition of a contract requires signatures of both parties and a value (money) or it does not constitute a contract.

I would be happy to refer you to some mortgage banker/brokers who could probably respond much better, but I do believe the down payment required to create a contract in your case will be refunded at closing.
0 votes Thank Flag Link Fri May 10, 2013
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