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Michael Denniston l Cell: (917) 699-0183
Residential Home Funding, Corp.
Licensed Mortgage Loan Originator l Sales Manager
6901 Jericho Turnpike Ste. 219 | Syosset, NY 11791
Main: (516) 605-1733 | Fax: (888) 881-2557
NMLS # 24076 | Company NMLS # 34973
That is the monies that you as a buyer would put down when you sign the contract of sale with your attorney. This amount is usually negotiated just like the price. Traditionally speaking in Brooklyn, this amount would usually be 5% to 10%. That is unless your down payment is less than 5% such as an FHA type mortgage where you can put as little as 3.5% down or a SONYMAE type loan where you can put as little as 3% down. Military veterans can buy a house and get a mortgage with no money down, however, in a traditional deal in Brooklyn the seller would still want you to put down some sort of earnest money (even if it is a flat amount like say $5,000).
The purpose and reason for earnest money is that is serves as a guarantee to the homeowner/seller that the buyer will not breach the contract and/or try to get out of the deal with undue cause. If the purchaser breaches the contract, the seller would be entitled to keep the earnest deposit as damages.
If I can be of further assistance, please let me know. Good luck!
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Another way of thinking about earnest money is "good faith". It's a gesture that's completely negotiable as a side-concern between seller & buyer, so an exact number is hard to come up with. I would typically estimate at least a 5% earnest deposit as a strong gesture of seriousness.
Oxford Property Group