My agent wants me to put down 5% or 15K. I always thought you could put down as little as 3-5K or less. The house is in NY. I know the money goes towards closing cost. I just think if I am buying the house, why should I have to put down such a huge amount. My agent said thats the only way the buyer will negotiate my offers.
2007-12-12 09:46:49 · 14 answers · asked by turbo36 2 in Business & Finance ➔ Renting & Real Estate
Well.....that is crap. Get another agent. And what ever amount you feel good about is the right amount. Remember, this is to show the seller good faith on your part. If you back out of the deal, you forfeit the earnest deposit. My last real estate deal was done with a $500.00 earnest money deposit. And, it is a buyers market. Any seller will be happy to negotiate.....
2007-12-12 09:53:03 · answer #1 · answered by tandkalexander 6 · 1⤊ 0⤋
Well in an ideal world all sellers would like to get the most amount down they can. Your job is to put as little down as you can, but within reason. I would say 5k would be sufficient on the home.Sellers are desperate to sell, and will most likely be looking at their sale price, not earnest money. There is always a risk of losing a deposit, so why risk more then you have to? If your agent isn't listening tell them you will submit the offer through another agent. He will listen then.
RE Agent,
Remax
2007-12-12 12:03:20 · answer #2 · answered by frankie b 5 · 1⤊ 0⤋
Your agent is full of it.
A good binder deposit that I always shoot for for my listing is 1% of the sales price. That would leave you with a $3600 binder. In the market here in FL people are desperate and I would assume the market in NY isnt any better.
The less you put into the binder deposit, the less risk you are taking. The more $ you put into the binder shows you are very serious about going through with the transaction.
Tell your agent that you don't feel comfortable with that large a binder and that you want to put down 1%. Is this agent also the listing agent? If so that would explain why they are asking for such a large binder/earnest $ deposit
2007-12-12 09:52:51 · answer #3 · answered by Anonymous · 1⤊ 0⤋
In a hot market, then your agent is probably correct. I dont know what area in NY you are trying to buy into.
However, with the nationwide market what it is, it is kind of a buyers market, as long as you have the financing lined up already. I had a house built for more than that and only put down 3K in earnest. But I'm not a real estate agent and I built in Texas.
If you are uncomfortable with it, get another agent.
2007-12-12 09:52:31 · answer #4 · answered by sahel578 5 · 0⤊ 0⤋
There are institutions that will lend you money without a deposit but I would assume they'd make up for this by charging you with an interest rate that's through the roof and halfway to the heavens. You're generally better off saving for a while to get the deposit and shopping around for a good loan. It doesn't take much difference in interest rates to make a big difference to your payments when borrowing so much money. If you earn a good income and have a good record you should be able to save a deposit soon enough.
2016-04-08 23:28:53 · answer #5 · answered by Anonymous · 0⤊ 0⤋
Generally (at least here in AZ) sellers will ask for 1-3% as earnest money. However, sellers think of earnest money as a commitment to buy and thus the more you put down, the more likely they are to listen seriously to your offer because it makes your offer more legitimate. i.e. you stand to lose something if you back out.
I'm not sure what the market is like in NY, but if there are multiple offers on the property there are a number of things that can help your odds of winning the sellers attention. Earnest money is one of them.... Other things like a pre-qualification letter from your lender and will help your case as well.
2007-12-12 09:55:03 · answer #6 · answered by Anonymous · 1⤊ 0⤋
An seller wants to think you are serious before they negotiate. Nonetheless, it sounds like your agent is aiming high. Maybe he/she gets a cut if you forfeit the earnest money. I would put 5K out and let the buyer -- not the agent -- decide whether or not to enter negotiations.
2007-12-12 09:51:35 · answer #7 · answered by Taylor's Dad 5 · 1⤊ 0⤋
The buyer wants a sense of security that your offer is genuine and not just a 'carrot on a stick'. The more money one puts down, the more seriously offers are taken. You don't HAVE to put down $15,000, but you then run a risk of the seller thinking you're not overly serious about this purchase.
2007-12-12 09:50:27 · answer #8 · answered by acermill 7 · 0⤊ 0⤋
The amount of earnest money indicates your committment to purchase the property, it also reduces your overall mortgage amount. I'm not quite sure why your Realtor is telling you to put 5% down, usually the loan officer discusses that with you. If for no other reason but education, I would ask your Realtor why they want you to put this much down.
In Minnesota the rate varies widely, but $2,000 to $5,000 is most common.
2007-12-12 09:58:01 · answer #9 · answered by Anonymous · 1⤊ 0⤋
It depends on teh area and on the sellers. If they have been messed with by previous people who seemed interested they may want more. I just bought a house for 240,000 and we put down 8,000 in ernest money. It is usually 5 to 10 thousand for every 100,000.
2007-12-12 09:51:02 · answer #10 · answered by christinekpainter 1 · 0⤊ 2⤋