The earnest money is strategic positioning.
It has greater significance based on the situation of the home to be purchased.
The more competitive the environment, the more leverage earnest money signifies.
Be aware, the check you write for earnest money will be deposited by the escrow agent. Don't write a check that can't be cashed!
Best of success in acquiring your new home.
ReMax Realtec Group
Palm Harbor, FL
727. 420. 4041
Like most things in a real estate transaction, there are advantages available if you think about each component.
A token amount as mentioned in many of the answers allows the offer to blend in with any other offers, and puts the seller's focus on the price offered.
A substantial deposit gets the seller's attention, and takes the focus off of price and gives them more confidence that this buyer will close.
The reality is that the deposit is not at risk as long as you have the contingencies in place, and you stay within the timeframes of the contract.
Be sure you have a knowledgeable agent help with the protective contingencies, and stay on top of the calendar.
Once the time has passed, the deposit is at risk if the buyer doesn't proceed to closing.
I also have a few blogs on my Trulia profile that may be of use to you when considering values on homes. That information is pertinent all across the country.
All the Best,
Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Sandals Realty http://www.ExplainShortSales.com
Unless, of course, you are trying to stand out from competing offers. Then you could offer to put up more after the home inspection has been done and you are moving forward with the sale.
Please feel free to call me if you would like to discuss this further.
Atchley International Realty
Good question! There is no amount set in stone. However $1000-$2000 is typical or 1% of the purchase price (whichever is more). This is just one of many common but important questions buyers like you have when purchasing a home. It is crucial you have someone on your side that can answer these questions and guide you through the process from start to finish and beyond. The best part is, your agent works for you with your best interests in mind and the seller pays his or her commission! It's a Win Win.
Feel free to send me a quick email or phone call with any questions or concerns.
There really is no set amount required nor is a minimum or maximum spelled out. I've seen anywhere from a few hundred dollars to over $100,000.00.
The "earnest money deposit" is a token amount followed by an amount equal to a certain percentage of the purchase price. The higher the initial deposit- the more seriously the offer is taken- usually.
MIAMI BEACH REAL ESTATE GUY
Typically I am seeing 1000 on most homes. If more is desired, it is usually addressed in the listing instructions to the agent, so ask your agent if there is such a request by the listing agent.
Myke Triebold, GRI, LMC, SFR
That is: 1,000 for 100 to 150K
1,500 for 150 to 200K
2,000 for 200 to 250K and so on. This is totally negotiable.
Also when it is a cash deal i have seen asking for up to 5% in escrow funds by sellers, and up to 10% when sold by goverment (like foreclosures)
Charles Rutenberg Realty
Some markets use a percentage ranging from 1 to 3 percent as an earnest money deposit. The higher the earnest money deposit amount, the more serious the buyer is. In a seller's market, buyers may increase the earnest money amount to distinguish their offers from others.