Hello Everyone,
Newbie here. I am wondering if there is a required amount of earnest money I have to provide when using a real estate agent? I know I can put up as little as $10 when not using an agent.
Also, I have always been told, when I am the buyer, use my own sales and purchase contract, but if I am using a real estate agent, do I allow them to write their own, and then I could possibly add my special clauses?
Thanks, in advance.
<<I am wondering if there is a required amount of earnest money I have to provide when using a real estate agent?>>
Have to provide? Yes…at least $0.01…but to make a serious offer you should go with a larger amount. Around here, the “usual” amount is $250. That money is paid by check and will be used to “open escrow” if the contract is accepted. Ask your Realtor about what is “customary”…this amount is not mandatory, just customary. The last house that I sold in NoVA had a copy of the $25,000 escrow check stapled to the contract
<<Also, I have always been told, when I am the buyer, use my own sales and purchase contract, but if I am using a real estate agent, do I allow them to write their own, and then I could possibly add my special clauses?>>
Most usually, they are required to use their approved contract forms. You can make changes and add addendums as necessary.
Keith
As Keith said, the required amount is $.01, but agents who are more familiar than many buyers, know that anyone who is being represented by an agent is going to be encouraged by that agent to ask for more “skin in the game”. Since earnest money is held in esrow and goes to the closing, the amount asked for by the seller, should in fact be enough to deter a principle to think twice before walking away from that they have contracted to do. contigencies in the contract should spell out how, when and why a contract can be terminated, with a refund or not of the earnest money.
Thanks for your responses.
I’d say it depends on the market.
Currently…some markets are dropping slightly…others are stagnant, and a few are still HOT!
In a hot market $10 earnest money won’t even be considered as a serious offer.
In my region…$2,500-$10,000 is common.
-Info