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.
Ardell - Your post got me curious. In your area, can a seller sue a buyer for damages if they fail to complete? In Saskatchewan, we have legislation called the "Civil Limitations Act" which prevents a seller from seeking damages in excess of the amount of the deposit. It's almost impossible to make a deal fly here with only a $1000 deposit.
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.
We just put earnest down on a home that we now no longer want (due to serious personal reasons). We were informed that the home inspection must be completed within 10 days of making the offer and putting down our earnest money ($2,000). A friend suggested that we just not have the building inspection, and the deal will fall through; hence, facilitating the return of our $2,000 earnest money. Is this true? The home in question is in Everett, Washington.
ARDELL
DellaLoggia
On Seattle Real Estate including Kirkland, Bellevue, Redmond, Green Lake and most areas around Lake Washington North of Downtown Seattle.
Phone: 206-910-1000 - Mailto:Ardell@RainCityGuide.com
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