Is the deposit for contract signing fixed at 10% for New York City? Or is the amount flexible? What if the offer is going to be made in all-cash?

Asked by Joe626, New York, NY Wed Mar 21, 2012

Note that I'm making an all-cash purchase, so ideally I would like to get away with say just a 1k deposit.

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15
Ross Ellis, Agent, New York, NY
Wed Mar 21, 2012
Although you could negotiate putting down 5% I have to agree with Mitchell Hall. If you are a serious buyer, and paying all cash, 10% down is nothing in Manhattan and does show your good intentions. Why should a seller take their apartment off the market for such a small deposit? Put yourself in their shoes. If you really want to purchase the apartment, put down 10%. If you're having second thoughts, withdraw the offer until you are completely sure. That way everyone is being treated fairly.

Ross Ellis
Licensed Real Estate Salesperson
Halstead Property, LLC
Member of Real Estate Board of New York
212.317.7828 direct
646.472.7875 confidential fax
770 Lexington Avenue, 10th Floor
New York, NY 10065
rellis@halstead.com
1 vote
Gail Gladsto…, Agent, 11743, NY
Wed Mar 21, 2012
Deposits at contract signing are a negotiable item. Nothing is fixed in NYC or anywhere else.

A contract is not a legal contract without a dollar amount; you must put a deposit on contract signing.
1 vote
Mitchell Hall, Agent, New York, NY
Wed Mar 21, 2012
The only advantage of an ALL CASH buyer to a seller is no financing contingency and possibly a faster closing. After a contract is signed and due diligence is completed why do you want to be able to walk-away for only $1000?

As a seller's agent or seller why would they take their apartment off the market for 30,45,60 days for $1000? Maybe for a purchase in the outer boroughs of NYC but certainly not in Manhattan.

In my opinion a buyer who wants out of a contract for $1000 is not a serious buyer. I rather have a qualified buyer with a mortgage and a financing contingency. Cash is not always King!

Mitchell hall, Associate Broker
The Corcoran Group
MHALL@corcoran.com
917-312-0927
1 vote
Anna M Brocco, Agent, Williston Park, NY
Wed Mar 21, 2012
Discuss with your attorney; deposit money can be negotiated, however 10% is customary.
1 vote
Marco Gomez &…, Agent, Jackson Heights, NY
Wed Mar 28, 2012
Unfortunately no attorney will allow less than 10%, unless it’s an FHA deal which only requires 3.5% down payment.The reason for this deposit, especially in an all cash deal, is that you have a vested interest in moving forward, whereas a 1K DP, indicates you are not sure and are willing to forfeit the 1K and walk away.
0 votes
First Last, , 90002
Wed Mar 28, 2012
Speaking as someone with personal experience with this, as well as professional experience, I think the most likely scenario is that the broker/agent, and/or the seller's attorney, would **strongly** advise the seller to reject your proposal.......and perhaps any other proposal you might bring forward in the future.

It can be very savvy, especially if you're an investor, to put down payments on numerous properties and then actually buy the only one that gives you the best deal, letting the others go. This is one of the many games that just aren't played in Manhattan (don't worry, we have our own set of unique real estate games ;) )

With money market rates hovering around .6% if you're lucky, the opportunity costs of your cash are minimal. Everybody in the transaction knows this. So the only reason you want to put down less is so you can walk away easily. (The only other possible scenario is if you're a foreign buyer who is getting a loan overseas, without disclosing in the USA, and are having trouble getting that loan. Still not good for the seller.)

If you really want this property, I would not even mention this proposal, for fear of being bounced out of the room. If you're not sure you want it, then I would wait until you are sure, and plan on putting 10% down.

Karla Harby
Lic RE Salesperson
Charles Rutenberg LLC
Manhattan
212-688-1000 x146
kharby@crrnyc.com
0 votes
Joseph Hasti…, Agent, Bayside, NY
Tue Mar 27, 2012
Hello Joe. The deposit amount can certainly be negotiated. Since you use a 10% DP, I would think you are talking about a Condo. Coops have their own downpayment requirements and that would usually be 20% at the least. The only other thing you may be able to negotiate down on the DP in Manhattan might be a town house, maybe. My basic answer is simply to agree with Mr. Hall and Ms. Ellis. As for the all cash aspect, yes, it cuts through the red tape of any loan proceedure but nobody walks away from the table with cash in hand anyway.

One other thing. Since I do also work in Queens, I can tell you I would not suggest to my client take their property off the market for $1K. I would have to conjecture you would be looking frantically to find something in the interum and not sweat the one grand DP if you walk. Bottom line, if you are set to make a serious offer, you can always ask. Good luck.
0 votes
Jacques Ambr…, Agent, Forest Hills, NY
Wed Mar 21, 2012
the usual is a 10% deposit. I have seen a 5% deposit in cases where it is 95% financing, or if the purchase price is quite large (over 1 milion) where the 5% deposit would be significant cost to the buyer. For example interest loss over a few months. The important thing is that the deposit is significant enough that the purchaser would not just walk away on a whim.
0 votes
Jenet Levy, Agent, New York, NY
Wed Mar 21, 2012
Most NYC contracts stipulate a 10% deposit at contract signing. I would suggest you tell your attorney that you would like to put down less and they will check with the other attorney if this is acceptable. All of the transactions I have done have been with 10% at contract signing with the exception of one where the buyer was financing 95% (back before our Sept., 2008 crash) and was able to give only 5% at closing.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com
0 votes
Timothy Basc…, Agent, NY,
Wed Mar 21, 2012
You can negotiate a down payment if the deal is all cash you should be able to work something out.
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Mar 21, 2012
the deposit amount is negotiable and is in relation to the sales price. The higher the price, the higher the deposit needed. Most home sunder 100k $1000 would be fine. the rule of thumb is 1% of the sales price. For new construction and risky purchase, it could be 5%.
0 votes
Nirmala Cara…, Agent, Bronx, NY
Wed Mar 21, 2012
This is the norm. However in each transaction the amount is agreed to between the buyer and seller. In transactions where the client in putting less than 10% down or receiving funds from a goverment grant, the dollar amount is negotiated between the two parties. I have not seen a $1,000 deposit but you can have your attorney discuss with the sellers attorney.
0 votes
Jennifer Chi…, Agent, New York, NY
Wed Mar 21, 2012
This is the norm, 10% earnest money deposit. I believe that everything is negotiable, so just ask. But chances are the sellers will not be negotiable with the 10% down.

Even if it is an all cash offer, you will want to show proof of funds and where this cash will be coming from, in conjunction to when you put in an offer.

If I can assist you with your home buying process, feel free to reach out to me at your convenience.

Jennifer Chiongbian
SVP/ Associate Broker
Rutenberg Reatly NYC
9172502284
0 votes
Mark Fisher, Mortgage Broker Or Lender, Bronx, NY
Wed Mar 21, 2012
The amount is flexible and is up to what the client and their attorney will allow.
Web Reference:  http://www.markfishernyc.com
0 votes
Katriel Cald…, , New York, NY
Wed Mar 21, 2012
I tell all my clients this.... EVERYTHING is negotiable, there is however a norm. If you are bringing something enticing to the table it will help you. If you're purchasing all cash it would be wise to place funds in escrow to at least show serious intent.
0 votes
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