Dec. 27, 2006 - Earnest Money Deposit

How Much Should it BE??  Looking back over the year, I have used everything from $1,000 to $50,000.  I haven't used less than $1,000 in over ten years, so let's call that the minimum.  $50,000 means you you reall want this house and there's no chance in hell you are going to change your mind about that!

While the seller benefits little whether it is $1,000 or $50,000, the seller is still impressed by the big numbers.  It tells them you are seriously committed to making it to the end.  That is a very important message to send...when it is true.  But if you have any reason to expect that you might change your mind, keep the number as small as possible...which is at $1,000. 

If you exceed your cash needs at closing with the Earnest Money Deposit, you will get the difference back at closing, assuming of course, that you DO close.

Dec. 27, 2006 - re: Earnest Money Deposit

Dec. 27, 2006 - re: Earnest Money Deposit

Norm,

Depends on the sale price and other issues.  In the Beach Cities of CA, everyone had to put 3% as the Earnest Money. In PA, FL and here, I've often used $1,000 with "forfeiture of earnest money" as the only remedy.  But it's been irrelevant, as they've always closed.  Never had something fall apart on financing and never had a buyer lose their Earnest Money, except to me, as a seller.

Dec. 29, 2006 - re: Earnest Money Deposit

Okay, since the comments work, I thought I would post a link to this OLD article that I wrote on the topic of earnest money deposits in my state.

http://derekburress.com/money-talks-earnest-money-deposits/