Home Buying in Inglewood>Question Details

Ms Led, Home Buyer in Inglewood, CA

What should i offer in earnest money for a 65k cash purchase for a condo in Inglewood?

Asked by Ms Led, Inglewood, CA Fri Jul 24, 2009

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Hello,

Having listed the most condos/townhomes in Inglewood over the last two years I am pretty knowledgeable on this subject. Although it's typical to put down around 3% as your earnest money deposit for homes, condos sometimes require up to 20% of the purchase price. Is this a bank owned home? Banks typically want the buyer to show them the $ upfront so putting something like 10% is required for Fannie Mae Owned Homes. Your earnest money deposit shows the seller just how serious you are about purchasing the property. Another thing to remember is that it doesn't hurt to ask for closing costs, it's pretty customary for the Buyer's agent to ask for closing costs, and if the Seller doesn't agree you'll get a counter. Since this home has been listed for over 100 days you would want to get more information as to why it might have been on the market for sometime ( Your agent may know, and therefore suggested what he/she feels will get your offer accepted). Typically the longer it sits, the more flexible the seller might be. You would want to talk to a Realtor who is familar with the area and willing to educate you on the best way to proceed.
0 votes Thank Flag Link Fri Nov 13, 2009
My agent suggested It was customary to offer 100% in earnest money for an ALL CASH SALE, that's when I determined that I didn't have enough information. I was also told not to ask for ANY closing cost! I never really got a satisfactory answer to what constitutes closing costs, and are they lower for a cash sale. I had originally been prepared to pay $65K for a $69K asking price, the condo was on the market for a little over 100 days.
0 votes Thank Flag Link Fri Jul 24, 2009
Hello Ms Led:

Typically, the Earnest Money Deposit is 3 percent of the total sales price, which, in your case, would be $1950 on a purchase price of $65,000. However, I would strongly suggest, if you do not already have a real estate consultant, that you please obtain representation. Not knowing the amount of the typical earnest money deposit is a simple matter to fix, but a sales transaction can quickly become a "nest of bees" with questions about the condition of the home, the costs, how to negotiate repairs, the appraisal, the loan, and the districts where the home is located--not to mention what happens at closing.

A Realtor will help you decipher the reports you read, and provide you with important information about the property that may affect your willingness to buy. Without having this help, you may seriously be hampering your ability to make a good, solid financial decision.

Talk with a Realtor today to help you protect yourself, and your finances, by advising you through the sales transaction. Good luck!!

Sincerely,
Grace Morioka
Area Pro Realty
0 votes Thank Flag Link Fri Jul 24, 2009
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