Pug

Is there a common rate (%) of purchase price that gets paid to the seller when signing a purchase contract for a home?

A real estate agent for seller is telling us 10%, which seems like a lot of money. We wanted to extract that from equity in current home once we sell it. Is it acceptable to give a sizeable check (to mitigate risk for seller), but maybe something closer to 5%? 10% is a big hit to carry between signing the contract and going through closing in 3 months.

Thanks!

scl23

10% is waaaay high unless it's a new development pre construction downpayment. A downpayment for just contract signing is usually a few thousand dollars. $3000 is common. The downpayment when closing is from 0% - 20%. I did 5%.

Don't waste time arguing with the seller's agent. If you're interested, just make an offer with a nominal downpayment. You can call the local realtor's association to ask them what's customary in your neck of woods.

GreenMonster

My earnest check was for 5%...

Doing a google search for earnest money turns up alot of ranges from 1-5%...

Pug

Thanks for the input !

Zippee

A lot of it depends on how until closing. To hold the place for a couple of weeks $500 is the usual. To hold a place for 3 months will be looking a lot more.

BigPimp

Depends on lotsa of factors. What is your agent telling you?

Price of the house is also a determining factor. 10% is high. How far away is the closing?

doopstr

You can give them whatever you want. It's up to the seller to come back and tell you they want more in escrow. I gave them 5k which was about 1-2% of purchase price.

The only way I could see the seller asking for more money is if they get multiple offers or if they thought your bid wasn't serious (ie. your loan application may fall through)

Pug

Their agent said 10%, we aren't working with one. We wound up offering 2%, and they accepted. It still puts us at significant risk, but it's not such a big nut.

BigPimp

Don't sweat it, in Jersey, it will be very difficult for me to keep your deposit of you walk away. Do you have an attorney?

Also, who is doing your financing?

cjhurtado2

Just in time. I just had this conversation with my agent. Its usually 1% of the price of the property. ie. $365K = $3,650. Since, I am not comfortable with whis amount to risk. I just said $2500.

I think the seller looks more on your pre-approval more than your earnest money. Just my thought.

paranode

My builder required a $500 earnest deposit, not based on value.