Best of luck.
I've also had some counter back with an increase in deposit.
A low deposit could be an indication they are not all that serious or committed to the deal which could mean the deal may not close.
In this market seller's, especially the banks, are not necessarily looking for the highest offer, just the one that is committed to the deal and will close on time.
Happy House Hunting,
Keller Williams Hollywood Hills
The earnest money deposit is a good faith deposit. The earnest money deposit serves to basically reassure the seller that you are serious about their property and willing to deposit that amount as a show of good faith.
The amount of the deposit can vary but its typically 3% in Los Angeles. The factors influencing it can be market conditions (so in a slower market you can probably negotiate it down), how much interest a property is generating (in a multiple offer situation a larger deposit could make your offer stronger) etc.
Usually your earnest money deposit is safe until you remove your buyer contingencies (loan, appraisal and buyer investigations). normally your contingencies would be active contingencies (which means that you as a buyer would have to remove them in writing) but a lot of REO addendums change that to a passive one - which means that once you pass the contingency deadline, your deposit might be at risk. your realtor should be able to advise you on how and when to release the contingencies in your purchase process.
Hope that helps
Here in the Hollywood Hills area, I would say 3% is the standard earnest fee. Most REO properties won't even look at anything less than that and now have had much more complicated contigencies and removals on the earnest money.
Make sure your realtor knows everything about your contract so that you dont end up losing the deposit, as i have seen this be very common when the sellers are the lenders.
Good luck to you
LA Real Estate Group
Lou & Alex
3% is the liquidated damages as well when a buyer does not fulfill thier end of the agreement.
Just keep in mind that there is no "standard" by which you must abide, it really is unique to your situation!
Wow, I'm surprised by the answers. My clients usually put down 1%. Occasionally the seller asks for a higher amount, usually when the client has 100% or 95% financing. When I list properties the amount offered is often less than 1% which I will counter a little higher.
As they say, "all real estate is local".
Traditionally buyers put 3% of the purchase price down as an earnest money deposit, but this is not a number that is set in stone. In today's market more and more buyers have been able to put 2% or even 1% down, as it is much more of a buyer's market. In a seller's market it would be hard to do this, but when there are no other buyers and sellers are desperate to sell their homes, they will often accept less money in the buyer's deposit. Feel free to give us a call or check out our website for more information! And good luck with your purchase!