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Old 02-01-2009, 08:13 PM
 
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I'm putting an offer for $300,000 for a house near Monterey. I'm new to the area but my realtor says I should put $10,000 earnest money to show my real interest. That sounds like a large amount to me. Is that the norm in California?
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Old 02-01-2009, 08:13 PM
 
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yes
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Old 02-01-2009, 11:07 PM
 
Location: San Jose, CA
7,677 posts, read 24,987,505 times
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That sounds very high. It is normally closer to 1-2%.
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Old 02-02-2009, 12:13 AM
 
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My Realtor... the one that I've used several times would never let me put down more than 1%... even when I wanted to.

She was wise from 25 years full time in the business and said you never know what might happen in an Escrow... so why tie up a lot of money and run the risk of something going amiss causing the money to be tied up...

Every Deal is unique... but, to answer your question... it does sound like a lot to put down.

Another option I've used is to state my Earnest Money, in the form of my personal check, to be held uncashed pending Seller's acceptance of offer and only then deposited to XYZ Escrow/Title Company.

I never use the Brokers Escrow Account... only the Title Company for all my CA transactions
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Old 02-02-2009, 08:39 AM
 
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Earnest money is only with the offer. If the offer is accepted then the check is deposited in to escrow. The check should not be cashed nor deposited until an offer is accepted. Competent realtors will deposit the check upon an accepted offer into an escrow account, not before.
For a $300,000 property $10,000 is not unusual. If I were selling a property at that price I wouldn't accept less than $5,000 in normal times. In today's environment I would want $10,000 too.
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Old 02-02-2009, 02:29 PM
 
Location: Los Angeles
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In Los Angeles, we offered $3500 in earnest money and was countered with $6000. We accepted the offer. This was for a $439,000 house.
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Old 02-03-2009, 07:47 AM
 
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
6,958 posts, read 18,542,824 times
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Quote:
Originally Posted by Ultrarunner View Post

Another option I've used is to state my Earnest Money, in the form of my personal check, to be held uncashed pending Seller's acceptance of offer and only then deposited to XYZ Escrow/Title Company.
Actually that's the language in the Ca Assn of Realtors form anyway.

Quote:

I never use the Brokers Escrow Account... only the Title Company for all my CA transactions
Again, most brokerage firms don't have trust accounts anymore and can't even accept an earnest money check made out to the real estate firm.


For the OP. The only reason you would want to place a big earnest money deposit is if you are making a significantly low offer. Otherwise 1% of the purchase price would usually be sufficient.
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Old 02-03-2009, 02:41 PM
 
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Quote:
Originally Posted by DMenscha View Post



Again, most brokerage firms don't have trust accounts anymore and can't even accept an earnest money check made out to the real estate firm.

Always good to get the facts from those in the trenches...

Thinking back to my first purchase rental property purchase back in 1983... the Broker had a policy that all deposits checks be made out to the Brokerage... My deposit Check got "Lost" never to be found... Several years later the Broker lost his DRE License over trust account oversight...

After the missing check, the agent who I came to really respect would only let me make my Deposit checks to the Title Company and she hand carried all the checks for all her clients to the title company... by passing the Broker's Trust Account.

She also was the same Agent that wouldn't let me make a large deposit... There were cases where I increased my deposit upon contingencies being met...
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Old 02-04-2009, 06:08 AM
 
Location: Northern Nevada
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We are currently in escrow on a 227,000 home in Placer County, we wrote a check for $5,000 made out to the title company..
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Old 02-04-2009, 06:42 PM
 
50 posts, read 263,573 times
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I dont know where you are living OP.

Houston TX - $260,000 Purchase Price
$2000 - Earnest Money
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