Home Buying in 98038>Question Details

Aaron Byrd, Real Estate Pro in Kent, WA

what is the lowest amount of earnest money a buyer should offer on a bank-owned property?

Asked by Aaron Byrd, Kent, WA Tue Apr 12, 2011

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BEST ANSWER
We advise our buyers to put out as little cash up front as possible....$500- $1,000 should get their attention and give them the impression that you are a serious buyer.

If it isn't sufficient, they will always ask for more in their counter offer.

Bill
1 vote Thank Flag Link Tue Apr 12, 2011
Broker Aaron....interesting that you still are only giving a "thumbs up" to agents from the state of Washington even after I left you a message about it yesterday. I don't really mind that you found my answer not to be helpful but that is the purpose of the thumbs up: to recognize helpful answers and not just to allow your fellow Washington state agents earn points particularly when other agents have basically said the same thing. I felt the need to call you out on it again as what you told me yesterday was a lame excuse.

Laura Feghali
Prudential Connecticut Realty
3 votes Thank Flag Link Wed Apr 13, 2011
Aaron,
I agree with many of the others, a thousand dollars is about as low as I would ever recommend.
2 votes Thank Flag Link Tue Apr 12, 2011
the lowest these days is $1k. It depends upon availability of cash from there.
2 votes Thank Flag Link Tue Apr 12, 2011
It depends on the price of the property, but I generally recommend a minimum of $1,000. Some banks require a higher minimum, and if so, that is usually stated in the listing, although probably not in the public comments. In a competitive situation, where the property is a good value and drawing multiple offers, a higher amount may help set you ahead of the pack. In the State of Washington, there are a number of opportunities for a buyer to legitimately terminate the agreement and receive their earnest money back, so there should be relatively low risk. And assuming the sale closes, the earnest money will be applied to the buyer's purchase funds. There are, of course, other considerations which could come into play, so having a good Broker to work with will help the buyer determine a reasonable amount.
2 votes Thank Flag Link Tue Apr 12, 2011
It depends how serious the buyer wants the house. Are there multiple offers on the property? The higher the earnest money, the more seriously the bank, or seller, will take the buyer's offer. The bank may weed out those offers that have low earnest money on the table.
2 votes Thank Flag Link Tue Apr 12, 2011
Hello Aaron,
I believe that it depends upon the bank and what they stipulate. Here in CT on a regular sale a 1% earnest money deposit is the norm.

Laura Feghali
Prudential Connecticut Realty
2 votes Thank Flag Link Tue Apr 12, 2011
I would suggets nothing under $500 bucks. But it could be as little a 1 dollar but I doubt that would be accepted
1 vote Thank Flag Link Wed Apr 13, 2011
Most banks require 1% and round up in Oregon.
1 vote Thank Flag Link Tue Apr 12, 2011
Based on listing price....I usually recommend no less than 1k no matter how low priced a property is
1 vote Thank Flag Link Tue Apr 12, 2011
If you check the supplements provided by the listing agent for the home, sometimes they will tell you the minimum earnest money required by the lender. I think I've seen 2 percent or $2,000 on my most recent offer. We ended up offering 10 percent of a cash purchase price. But the sale price was in the low 5 figures.
1 vote Thank Flag Link Tue Apr 12, 2011
1% with a $1000 minimum, most REO (Real Estate Owned) listings actually have that information in the private Realtor remarks.
0 votes Thank Flag Link Wed Jul 18, 2012
Aaron, I know you have lots of answers already but I thought I would share my experience with you. I just don't think it maters very much. When putting in offers on Bank Owned homes you are dealing with a number cruncher on the other end, if you put something standard like $1000 it seems to be just fine though its not going to be a deal breaker either way. I tend to place offers for investors and when I put an offer out with a EM of $1000 places like Fannie Mae will simply send their counter offer and request that investors write a EM check for 10%. They seem to care more about the sale price of the home on the offer then any other detail. There is very little emotion involved when buying from a bank.
0 votes Thank Flag Link Thu Apr 12, 2012
Laura, thank you and I accept and appreciate your comments. I wish you great sucess too.
0 votes Thank Flag Link Wed Apr 13, 2011
Aaron,
I truly apologize if I was incorrect in thinking that you were the individual giving the "thumbs up" to only WA agents. Apparently, someone else (presumably from WA) was doing the WA state agent clicking as that was the case earlier today which prompted me to reach out to you again. Please, accept my sincere apologies for assuming that it was you.
Best wishes to you for a successful Spring market!

Laura Feghali
Prudential Connecticut Realty
0 votes Thank Flag Link Wed Apr 13, 2011
Laura, for the second and last time. I gave a thumbs up to one person who answered my question right away and no one else. I haven't been back to check responses because I'm busy working. There is no WA broker, thumbs-up, points-hoarding conspiracy as you are implying and I did not use the term "lame excuse." Let's be professional going forward please.
0 votes Thank Flag Link Wed Apr 13, 2011
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