Trying to get a house in Texas. Approved for a FHA loan. I was told by the seller I wouldn't have to put any

Asked by Nikki, Pearland, TX Tue Mar 11, 2008

Trying to get a house in Texas. Approved for a FHA loan. I was told by the seller I wouldn't have to put any money down because I am a first time homebuyer. But they want $4600 for earnest money on a $200,000 house. Is this normal and should I give the money. We signed an earnest money contract.

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Thomas Johns…, , Houston, TX
Tue Mar 11, 2008
Nikki: You are represented by a Realtor, aren't you? Your Realtor would be able to advise you the appropriate earnest mony contract. If you have signed a contract that commits you to that earnest money, it's a little too late to ask that question. Again, consult your Realtor. No Realtor as a 1st time buyer? This is a Dr. Phil moment...
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Dallas Texas, Agent, Dallas, TN
Tue Mar 18, 2008
WOW where is your realtor on this ? Usually the earnest money is 1% of the list price of the property. $4,600 seems high for earnest money

I am a loan officer if I can assist please let me know
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Kathy Fisher, Agent, Decatur, TX
Tue Mar 11, 2008
First, are you buying a For Sale By Owner? There are some first time buyer programs out there but be very confident with your mortgage company. FHA loans will not allow you to pay some of the closing cost and the seller is required to pay them. It sounds like this seller is trying to get those charges back in the earnest money payment.

On a $200k house, the norm is usually around $1000-$1500. If you are not using a Realtor, who had the earnest money contract and who explained the conditions written in the offer?
YOU really need representation if you don't understand what you are signing. You can even go to a real estate attorney and have them go over the details for you. BE VERY CAREFUL and good luck.
1 vote
Anna Stevens, , New Braunfels, TX
Wed Apr 23, 2008
Typically, FHA loans require 3% down, so on a $200, 000 house that would be $6000. I have seen where the seller can help you if you do not have the full amount but it is usually 3%. This does not include closing costs you will have also. Hope that helps. Consult with your lender, don't take the word of the seller.
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Cheryl March…, Agent, Nacogdoches, TX
Wed Apr 23, 2008
I agree with the other posts that you definitely need representation if you don't already have it. $4600 is higher than I have seen on a $200,000 home. In the Pearland/Alvin area, 1% is typical. It can be a little lower or higher, however. This amount seems high to me.
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Bruce Lynn, Agent, Coppell, TX
Wed Mar 12, 2008

Nice questions. Let YOUR realtor and YOUR loan officer walk you through the process step by step. In these cases you should not normally need to deal with the owner. It is not the owner who decides if you can get 100% financing or not, but rather YOUR lender. It's their money, so they decide what works and what doesn't as far as if you need a down payment or not. As far as earnest money goes it is negotiable. The more earnest money the stronger your offer, but also the more risk you take if something happens with your lender or other unforeseen issues. In my market area $2000-$1000 would be in my opinion normal earnest money. I've seen less and more. If for some reason you are not using a Realtor, then ALWAYS use a board certified Real Estate attorney before you sign a contract. This investment is normally one of the biggest an individual can make so having expert representation can often prove the difference between satisfaction and disaster.
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