how much should a good faith deposit amount be for on a million dollar home?

Asked by Happichild, Suffolk, VA Thu May 31, 2012

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6
Angie, Home Buyer, Virginia
Sun Oct 21, 2012
Depends on how much you are actually paying for it too...I just saw one for $85 K for some reason (that's CRAZY!!!!) that was a $1.2 Million home, BUT it had $3500/mo in taxes and from what I understand, in this area, that doesn't come down. So I would think that at least $15 K would be reasonable and that's as a buyer....
0 votes
Lana Cary, Agent, Virginia Beach, VA
Thu May 31, 2012
If it's a new construction, a custom build, most likely 10%. For a resale home, I would consider a minimum of $15,000. The seller will view a higher earnest deposit as a show of strength and confidence. The deposit can later be applied to your closing costs or down payment.
0 votes
John R Beave…, Agent, Portsmouth, VA
Thu May 31, 2012
depends on which side of the transaction you are on. if you are the seller you want the deposit to be large enough to show that the buyer is serious and large enough to discourage the buyer from backing out of the deal.

if you are the buyer you want to show you are serious but not too much.

As an agent i would request at least a $25,000 deposit if I represent the seller and $5,000 to $10,000 for a buyer.

All of this is negotiable .

Call me if I can be of assistance.

John
0 votes
Irina Karan, Agent, Aventura, FL
Thu May 31, 2012
Each area is different. This has to be asked of your agent - because he/she is right there, in the trenches, every day.

In our area, 10% escrow deposit seems to be the norm. However, in the buyer's market,
(and you got to find out which market you are in - in the area you are buying) lesser percentage
could be negotiated as well.

Escrow amount is part of the offer - the more you offer, the more confident you look as a buyer.
Sometimes, you can negotiate a better deal with this being a factor (and there are other factors too).
Bigger escrow deposit could mean a lower price tag...

The con in putting more money down is the risk of loosing your escrow deposit.
However, this happens if you don't follow the contract timeline or requirements.
So, before signing, make sure to ask about your "exit" strategies and the important dates to go by.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
0 votes
Ron Thomas, Agent, Fresno, CA
Thu May 31, 2012
It would depend on how much good faith you have:
The point is to show the Seller that you are really, really committed to this.
If you are either paying cash, or putting a down payment; the moneys will be assigned to those expenses. If you are putting very litlle or no down; then the Deposit will be refunded to you, shortly after the close of escrow.
The only problem arises if they back out, without good cause.

Good luck and may God bless
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Thu May 31, 2012
I have written them with $3000 and some with more than that. I would say $3000 to $6000 should be sufficient. Some sellers agents want to see 1%.
0 votes
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