Earnest money question

[jfel]

We are about to submit an offer and as a first time home buyer, I would like your advice on earnest money. Our realtor told us that its traditionally 1-3%. The higher the deposit, the more “seriousness” it shows.

In this sellers market, or maybe in general… how did you determine how much earnest money to put down?

Since we found our needle in a haystack, we do indeed want to show we are serious. But what is the risk of putting down a bigger deposit? In what type of scenarios would we loose it?

Right now our earnest money is about 2.5% of the offer. But we haven’t signed or submitted anything just yet. We plan to submit it tomorrow.

On another note- any home inspector recommendations?

[Doofrat]

We used Neil Muckler for our home inspection and he was really thourough and provides a nicely formatted inspection report with lots of pictures.

Whoever you use, get the inspector lined up ASAP as both you and the seller will want an inspection first thing.

I honestly don’t remember what our earnest money was, but I don’t think a larger amount will make any difference as you would just get it back if the deal fell through.
From what I understand, the way offers are written, you can get out of it as a buyer for pretty much any reason except “I just changed my mind”.

One tip on showing seriousness – Writing a letter to the seller customized to the particular property. Sounds corny, I know, but there are people out there you will be competing with that just throw out a bunch of offers after the weekend and don’t have time to write a customized letter, so it may stand out for the seller.

Good Luck!

[spdrun]

Would this work as a reason to jump out of contract? “My Feng Shui expert said the house was oriented wrong.”

[SK in CV]

Earnest money doesn’t make a damn bit of difference until you have an accepted offer. Even then, it doesn’t really matter much until the money goes hard. If the seller wants more they can ask for more.

[jfel]

Thanks Doofrat,

We have the offer letter ready to go- I am thinking that would have more impact than the percentage of our earnest money deposit?…as in general the offer is below asking but our financing is rock solid with proof.

Im reading over the offer, over and over again and can’t get past these hypothetical “fees” that could incurr that would be deducted from our earnest money deposit under section 14. D. (1) SELLERS RIGHT TO CANCEL and 14 H. EFFECT OF CANCELATION ON DEPOSITS

Any idea of a scenario that would result in the buyer losing this deposit?

[jfel]

Thanks SK- thats exactly what I needed to hear.

[jfel]

Thanks SK- thats exactly what I needed to hear.

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