How much percentage is an earnest money for a new construction and what name does the check has to be in?

Asked by New Home Buyer, Ashburn, VA Tue May 28, 2013

We are going to buy a house in VA. Its a new construction and builder has asked for 5% of the total cost of the house as earnest money and the check we give is in the builders name. is that true?

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Stewart Gard…, Agent, Fairfax, VA
Wed May 29, 2013
Great question! I have clients who just purchased a new construction home in Ashburn at One Loudon and I am familiar with the builders there. They placed an earnest money deposit of $25,000 on a home that was priced around $600,000, which is right around 5%. The builders may also want a deposit check for a percentage of the total costs of any upgrades you decide to add to your home as well. There are a few items and clauses in the builder's contracts that you have to watch out for - feel free to contact me if you would like to discuss the process.


Stewart Gardner
Coldwell Banker Residential Brokerage
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That answers very well more than my question. the next question i had in my mind was "do we need to even pay 20% of the design center options we choose?" and you gave me the answer. thanks so much, sure will contact if we need more info!
Flag Wed May 29, 2013
Azmi Alkurd, Agent, Sterling, VA
Tue May 28, 2013
Earnest money for new building varies and it is negotiable. When buying from the Builder, you better served by having a real estate agent with new home sales experience to represent you. There is a lot going on during the home building and the builder/builder representative/Sales person will be looking for the best interest of the builder. So, why not to have a professional represent you and work for your best interest, especially when it does not cost you anything, it is a FREE service to you. The builder will not give you discount if you don't have an agent to represent you., and he will not charge you more if you have one.

If you have any question or you need any real estate related help, please don't hesitate to contact us directly. We will provide the most professional advice and counsel to you at no charge and no obligations.


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