As a Real Estate Investor, what is a good Binder Deposit amount to offer to the seller?
I have used $10 but some of the sellers think that is too low and that I am not at risk. I have explained that I am a Real Estate Investor that is making numerous offers and don’t have a lot of money to tie up on offers.
Is that acceptable?
Also, when can the seller cash my Binder Deposit Check or money order?
Never give your deposit to the seller- give it to your title company to hold in escrow.
How much you give the seller as a deposit is up to you. Personally, I’ve never once had a seller ask me for a deposit.
I’m assuming you are talking about private sellers, and not listed properties. If you are talking listed properties, they will usually want $500 or 1k minimum.
If you are buying, it doesn’t really matter how much you give, because it comes off the top if the price and your purchase contract should give you plenty of ways to get out of the deal and get your deposits back, if you change your mind.
A larger earnest money makes you look more serious and more qualified in the seller’s mind.
If you are doing a short sale, there is no money in it for the seller, so the money that you give him is just to make the contract legal. $10 might be the very most, because he doesn’t have any money coming to him, and the bank doesn’t want him to get any money.
From my experience if your going to offer $10 bucks don’t offer anything at all. You are far better off to use an inspection clause with the deposit money due after the release of the inspection contingency. The seller can accept that because you let them know that you don’t want to right them a check only to find out something is wrong with their home, and then you have to go through the hassle of getting the check back.