While it's not required by law, a good rule of thumb is to keep the good faith deposit at 1% of the purchase price. It's only to show the sellers how serious you are about your purchase, nothing more then that. However, when you make out a check for the good faith deposit, make sure you have the funds as escrow companies usually cash the checks soon as they receive them. Good luck!
"Straight answers all the time"
A good faith deposit is just that: showing good faith that you are serious to buy the property. The good faith deposit can be as low as $1 and as high as 3 % of the purchase price. It is not required by law, but if no good faith deposit is made, the seller may not take take the offer as serious and rather waits for the next one that has a deposit. The higher the deposit, the more chance the offer has, to get accepted. This deposit stays in the posession of either the buyer's representing agents office, in a case of a short sale, until the short sale has been approved by the sellers bank(s) or upon acceptence on a foreclosure, will be deposited in the title company's trust account. The buyers contract has certain days where the buyer can back out of the contract for certain reasons. If the buyer decides not to continue with the purchase past these days, there is good chance that part of or all goes to the seller. I hope this answered your questions.
Century 21 Mammoth Realty
The good faith deposit is not required by law, but it can not more than 3% of the asking price. However, the seller may requist to make sure only serious buyers submit offers. For your second qustion, it will depend the contract, please consult with your agent.
Hope that helps.
If there is anything I can help, please contact me.