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How Much Should Your Deposit Be To Buy A Home?

Usually when you make an offer on a home that is for sale you will have to write out a check that will be considered Earnest Money Deposit.  Its part of making a contract a contract and showing that you you have some kind of monetary consideration involved.   Now the deposit should not be made out to the seller or to your agent or even the other agent involved.  The best thing to do is to make out the check to a 3rd party , which is where your escrow comes in.   This keeps every much less complicated and keep in mind that your check is only to show that you are willing to make the deposit in the said amount.  It does not mean that your check will be cashed until your contract is accepted and you will be opening up escrow.   Typically your agent will hold on to the check until your offer is accepted and then he will be responsible to delivering the check to the escrow company that you will be using to for the escrow transaction on the home you are trying to purchase.

The size of the deposit can vary as little as $1,000.00 or as much as your actual down payment if you are getting a loan or as much as you like if you are buying the home in cash.  The reality is the larger the size the more of a serious buyer you will seem to be and willing to put up until the close of escrow.   Keep in mind that you deposit is actually going to be part of your down payment so its not something extra and beyond that you have to come up with to purchase the home.

Also remember you can lose the deposit as the same time if you the buyer fail to perform to close the transaction.  Now there are exceptions you can go into escrow for example.  This is where your contingencies come into play such as your inspections and your appraisal, basically that you have no issues with the property or any current conditions.  But lets say that there are repairs that come into play and then you as the buyer and the seller cannot come to terms of those repairs.  Then the funds can be returned to you as long as both you and the seller agree on the release of those funds.

Also remember when you are first making an offer and submitting a deposit that this is part of the negotiations.  So the seller can come back for example along with other conditions prior to accepting your offer to request a higher deposit.  For example you can make an offer on a @200,000.00 and make a deposit of $2,000.00.  The seller can ask that you increase your deposit, that being said you can also come back on a counter offer to offer less than their request or that it stays the same.

The amount of the deposit will be determined by the climate of the market as well as terms of the purchase.  Good luck on buying your home there are still many great deals out there.

 

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