Home Buying in Skokie>Question Details

Adam, Home Buyer in Skokie, IL

Is it reasonable/common for a seller to ask for 10% of the purchase price as an earnest money deposit?

Asked by Adam, Skokie, IL Wed Aug 24, 2011

After accepting our offer, the seller asked us to increase our earnest money deposit from $1000 to 10% of the purchase price which would make it a $25,000 deposit which I feel is excessive. This was added into the contract during attorney review by the sellers lawyer. Is this a reasonable, common request? I don't feel very comfortable putting this much money at risk and I have never heard of anyone putting up such a large deposit, especially in a buyers market, with little chance of being outbid.

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5
I agree with everyone else. Excessive. In San Diego it's typically between 1-3% of the sale price.
0 votes Thank Flag Link Thu Jan 17, 2013
that is excessive.
1 Red Flag.
If you're under Contract, just tell them no, in writing.
Watch out for more Red Flags.
0 votes Thank Flag Link Wed Aug 24, 2011
Since you're in "Attorney Review" period, the only way they can increase your earnest money to 10% is if you agree to it.

In our area 10% is excessive. Speaking as a listing agent who works in your area (Skokie is just down the street) ... what we're looking for is enough money 'on tap', to keep you from just changing your mind and walking away.

If you're asking me... $1,000 on a $250,000 home is not enough. (I know, I know... in some areas, some regions that's typical... but not here in Skokie)... I'd be looking for a minimum of $5,000, and preferably $10,000. But, since they've already accepted your contract with only $1,000 on it... they can't just change it unilaterally.
0 votes Thank Flag Link Wed Aug 24, 2011
Alan May, Real Estate Pro in Evanston, IL
MVP'08
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That is VERY excessive! $25k is more of a down payment then an earnest money deposit. I wouldn't do it. Do not do anything that your not comfortable with. That is a lot on the line.

Good luck

Heather
0 votes Thank Flag Link Wed Aug 24, 2011
That's excessive. Don't do it. Understand that the seller's lawyer either: (1) is working to protect his client's interests; or (2) knows nothing about real estate. Either way, that's not in your best interest.

Talk to your Realtor for more information.
0 votes Thank Flag Link Wed Aug 24, 2011
Don Tepper, Real Estate Pro in Burke, VA
MVP'08
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