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Replies (12)
- sunnyview
- Contributions:25139
- Dan, "the_country_hick"
- Contributions:4697
I have seen several buyers who tried to buy a house and things went wrong then found out they could not get their earnest money back. Why offer more than a $20 since it could just disappear with no reason or be tied up for years if the sellers do not wish to release it?
- Gannet
- Contributions:76
Couldn't get their earnest money back? Huh? Please do tell, because I want to be SURE to be protected against any such thing.
- Dan, "the_country_hick"
- Contributions:4697
Gannet, since you asked, here are a few examples of the potential problem. Pay attention to the last link. It includes a lot more questions in a similar way to what your concern is.
How to get back my earnest money?
Pulte kept our $9400. earnest money on a spec home we were purchasing for $350,000. Can we get it back?In September, we entered into a contract to buy a house and paid $1500.00 in earnest money.
Seller refuses to release our deposit when we canceled the deal because of bank disapproval of loan, despite the presence of contingencies. What next?
How Do I Get Earnest Money Back If Seller Refuses To Sign Release??Can the seller walk away and keep our deposit because we are 3 days late?
Look at this one carefully.
Is escrow safe? If I put $30,000 down as a down as earnest money. What keeps a dishonest seller from refusing to release earnest money?
Thu Jul 8 2010, 19:34
Look for this time and date stamp. The reply there shows a lot of similar questions to yours and the links to them.
How to get back my earnest money?
Pulte kept our $9400. earnest money on a spec home we were purchasing for $350,000. Can we get it back?In September, we entered into a contract to buy a house and paid $1500.00 in earnest money.
Seller refuses to release our deposit when we canceled the deal because of bank disapproval of loan, despite the presence of contingencies. What next?
How Do I Get Earnest Money Back If Seller Refuses To Sign Release??Can the seller walk away and keep our deposit because we are 3 days late?
Look at this one carefully.
Is escrow safe? If I put $30,000 down as a down as earnest money. What keeps a dishonest seller from refusing to release earnest money?
Thu Jul 8 2010, 19:34
Look for this time and date stamp. The reply there shows a lot of similar questions to yours and the links to them.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2731
Dan, the answer to your question" "Why put down more than"$20.00"?.......well, in my area at least, one answer might be that no one would take their home off the market for $20.00 - I had to give my painter a bigger deposit than that. I ordered a new dresser, and had to give a 50% deposit........well, you get my point.
If you can get away with putting $20 in escrow to buy a home - go for it.
Around here, you wouldn't go very far.
Let me know how that works out for you!
Most people purchase homes with contracts that spell out how, when and if deposit money can be returned.
People who question this on the internet, may not have legal representation, but clearly need it.
As far as the answer to this question - from what I have learned on the internet, it really varies tremendously depending on where you are in the country.
It is considered normal and typical in my area (and I preface this with MY area) to put 10% of the purchase price in escrow......obviously, if a buyer is putting down less that that all totalled, then the amount would be adjusted accordingly.
If you can get away with putting $20 in escrow to buy a home - go for it.
Around here, you wouldn't go very far.
Let me know how that works out for you!
Most people purchase homes with contracts that spell out how, when and if deposit money can be returned.
People who question this on the internet, may not have legal representation, but clearly need it.
As far as the answer to this question - from what I have learned on the internet, it really varies tremendously depending on where you are in the country.
It is considered normal and typical in my area (and I preface this with MY area) to put 10% of the purchase price in escrow......obviously, if a buyer is putting down less that that all totalled, then the amount would be adjusted accordingly.
- Faye Kirby, "fekirby"
- Contributions:11
I typically tell my buyers that if you want the house, the earnest money is just another way to show your interest. I suggest a minimum of $500. It shows that you have money to put down, and you are serious about the offer. However, because there are a lot of things that can go wrong between the offer and closing don't go crazy with putting too much money down as it can get caught in limbo.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2731
I really wish zillow had the person's location available and visible under their name, It would , imo, be useful to see in what parts of the country different opinions are originating.
That being said, what I find interesting is that a number of agents say, "Well, this is what I advise".
My question to you is - don't you have standard or expected ways and practices of doing business? Is it each man for himself? Do you just wing it and see what you can get?
When, as a listing agent for example, I receive a written offer, I have certain expectations regarding that offer, based on how business is usually conducted here. If they are mssing, it may send up red flags, but at the very least, it is reason for me to question why that offer has deviated from what is customary and usual.
Is it just my area that works this way? I have noticed, even on trulia, that many agents don't seem to have set expectations - especially when it comes to escrow money.
Just curious here........
That being said, what I find interesting is that a number of agents say, "Well, this is what I advise".
My question to you is - don't you have standard or expected ways and practices of doing business? Is it each man for himself? Do you just wing it and see what you can get?
When, as a listing agent for example, I receive a written offer, I have certain expectations regarding that offer, based on how business is usually conducted here. If they are mssing, it may send up red flags, but at the very least, it is reason for me to question why that offer has deviated from what is customary and usual.
Is it just my area that works this way? I have noticed, even on trulia, that many agents don't seem to have set expectations - especially when it comes to escrow money.
Just curious here........
- Gannet
- Contributions:76
10% earnest money? So, $20k on a $200k home? And what if the seller is a whackjob who won't authorize release if the deal goes south, as illustrated in some of the examples linked above? Then what? The buyer has to pay a couple grand in lawyer fees to get it back?
Against the buyer's earnest money, the seller puts up...what? The fact that they "take their house off the market" (but presumably would still take back-up offers)? How does the seller risking basically nothing balance against the buyer risking $20k?
I'll tell ya, from the point of view of this 56-year-old "first time buyer", my education process seems to be showing more and more that real estate is a game pretty much rigged to favor everyone but the buyer.
Against the buyer's earnest money, the seller puts up...what? The fact that they "take their house off the market" (but presumably would still take back-up offers)? How does the seller risking basically nothing balance against the buyer risking $20k?
I'll tell ya, from the point of view of this 56-year-old "first time buyer", my education process seems to be showing more and more that real estate is a game pretty much rigged to favor everyone but the buyer.
- Meg Russell, "GreenBrokerMeg"
- Contributions:16
In North Carolina, we recommend a half of one percent, and that usually winds up being somewhere between $500 and $3000. Our sellers would not take the home off the market for any less; this deposit reflects how serious the buyer is. I wonder if the agent talking about $20 is from a state where a very de minimis binder deposit is first taken. There is no such binder in our state. The earnest money becomes the deposit and the Offer to Purchase becomes the contract, no attorneys are involved in writing that as we have a standardized contract that has already been authorized by the Bar.
- Debra (Debbie) Rose, "Livingston NJ"
- Contributions:2731
Gannet - just to clarify and as a point of information, unlike many parts of the country, in my area we use attorneys right from the start - so the parties are already paying for representaton. The attorney steps in once there is a written agreement (we have a 3 day attorney review period during which time either party can get out of the deal), and follows through until closing. Closings usually take place at the buyer's attorney's office. Very often the seller's attorney will be holding the escrow money.
And, yes, 10% is customary and usual here - I am not creating this scenario, just responding to the question posted above.
Just closed on a sale for 710,000, and we had $71,000 sitting in escrow - this isn't written in stone - but rarely is the amount less than 5%.
And, yes, 10% is customary and usual here - I am not creating this scenario, just responding to the question posted above.
Just closed on a sale for 710,000, and we had $71,000 sitting in escrow - this isn't written in stone - but rarely is the amount less than 5%.
- Mitchell Jamel e-PRO, "MyStAugustine"
- Contributions:130
Real Estate is a local business and what is normal will be by area,
In Florida we use title companies and our closing take 45 minutes.. Also I just close a deal in North Florida for $550,000 with only $9,000 EMD and this same customer sold a Home in NJ for $535,000 with only 15,000 EMD
So what is normal, what a seller will accept
In Florida we use title companies and our closing take 45 minutes.. Also I just close a deal in North Florida for $550,000 with only $9,000 EMD and this same customer sold a Home in NJ for $535,000 with only 15,000 EMD
So what is normal, what a seller will accept
- Brenda McMillan, "BrendaMcMillan"
- Contributions:3
Hi Tripp...
I generally recommend $250 earnest money to be submitted with the offer. If the seller counters the offer with a higher earnest money requirement, so be it. We all know that a contract is legal without any earnest money.
Good subject for discussion.
Brenda
I generally recommend $250 earnest money to be submitted with the offer. If the seller counters the offer with a higher earnest money requirement, so be it. We all know that a contract is legal without any earnest money.
Good subject for discussion.
Brenda
How much earnest money is required when purchasing?
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- 5.0/5.0
- (6 reviews)
Contributions:278From this point, a continued discussion of earnest money would get complicated and involve discussions on default, due diligence, contingencies, etc. and should be handled on a case by case basis.
Tripp Montgomery
Realtor
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