Karen, this is just semantics. As I mentioned, I am familiar with real estate deals in other areas of the country, although I am from New York and 99% of my business in in NY. I am assuming the OP is not from NY, and is using the terminology that is not used here.

A good faith deposit is not used in Westchester. Until contracts are signed, the owner can still recieve offers. At contract signing, 10% of the selling price is put into an escro account set up by an attorney. A smaller % may be negoiated but, 10% is the most common amount.

Deborah and Barbara, in other areas of the country they use the word "good faith deposit" generally for the deposit given on contract. I have handled mortgages in many other states, and they will often give only $1000 when the contract is signed. I have buyers that come to New York from out of the area and are very surprised that they are asked to give 10% when signing the contract. Although it is not really my job to do, when I am speaking to a buyer that I know might not be expecting this, I let them know so that they have the time to move any money around that they have to before signing the contract.

In Westchester County as opposed to possibly other areas around Metropolitan NYC, it is more common to make a 10% deposit at the time of contract signing as Barbara has indicated. If the deposit is to be less it should be agreed on with the seller at the time the offer is first presented.

Unlike other areas of the country when you present your offer to purchase in Westchester County, there are no binders taken and as a result your "acceptable" offer is not "binding" on you or the seller until such time as a contract is produced and signed by both parties. Once you have a fully executed contract, both parties are bound by the terms of the contract. Until contracts are signed on both sides, the home usually continues to get shown and should another buyer make an offer that is more favorable, the seller is free to accept it or try to renegotiate with the first buyer.

In Westchester County it is not customary to have any good faith deposit. It just isn't done. Our deals are handshakes only, which means until contracts are signed..all you have is the good word of the seller. We usually ask for at least a 10% deposit on contract signing but it could be less. That money is held in escrow by an attorney. If you want more information, feel free to contact me by phone or email.

Generally, in the New York metropolitan area, it is customary to give a deposit equal to 10% of the purchase price. Because that now amounts to a large amount of money in our area, it is not unusual for attorney to request a 5% down payment on contract, as this money is held in a non interest bearing escrow account, and is an amount that a person would never want to walk away from. The buyer will need to have this money available when they sign the contract. If you would like more information about the mortgage process in New York, including closing costs, please feel free to e-mail me.

Robin Silverberg
Senior Loan Officer
Preferred Empire Mortgage