Due Diligent & earnest money question in Cary Apex (Morrisville: sale, houses)

[jackyen_2000]

Hi guys,
I'm wondering what's the norm for the DD and earnest money these days in Cary/Apex/Morrisville? For SFH between $550K-750K range. I'm guessing DD is like 2000 and earnest money like 1% of the purchasing price? Am I off? Just wondering. thanks

[Mamasince2004]

We just moved here to Apex in June, 397k house, we had to pay $4500 DD and 1% earnest money

[TarHeelNick]

Depends on the house/situation.

If you're in a multiple-offers situation....higher DD money is (unfortunately) the new norm. 1% won't cut it. Your RE agent should help you factor DD and EMD into any offer you make.

[RobotDevil]

In a hot market where homes sell fast, my realtor recommended 1% earnest and up to 5% DD depending on how you feel about it. We did 1% earnest and 3% DD and our offer was accepted. Your mileage may vary. If homes are selling fast in your area but you don't want to overpay on the home, then earnest/DD is your best bet since it goes towards closing costs anyways.

You can make other adjustments as well, such as paying all closing costs, but have the seller pay for a 1 or 2 year warranty which is about $550 per year in exchange for the higher DD or not paying closing costs.

I've found that it's easier to add stuff like warranties, extended diligence periods etc up front and trim them back based on how the seller responds to the offer.

[SFspiderman]

5% DD fee? That's insane. Even 3% seems bonkers.

Traditionally EM should be significantly higher than DD, but DD has been trending higher due to market competitiveness. But wagering $10,000-$25,000 or more at offer time is nuts.

[RobotDevil]

Originally Posted by SFspiderman

5% DD fee? That's insane. Even 3% seems bonkers.

Traditionally EM should be significantly higher than DD, but DD has been trending higher due to market competitiveness. But wagering $10,000-$25,000 or more at offer time is nuts.

Yes it is, which is why for that contract we added in specifically that if there were repairs that cost more than a certain amount and the seller wasn't willing to repair, we would get the DD back, and requested an extra week on top of the normal DD period. Basically if WE cancelled the sale without cause then the seller keeps the DD, but if there were major issues with the home that the seller wasn't willing or able to repair then we got the DD back.

[southdreamer]

We gave 1500 DD and found out later that house is near quarry, so we changed our mind about the house and seller kept our $1500. It wasnt multiple offers situation thought...We didnt try yet putting another offer, so I am not sure if 1500 is a good DD, but thats what worked for us.

[RedZin]

I think that in the hot price brackets with lower-priced houses (sub 300k) you would probably see much higher DD percentages because people are fighting for good houses.

In the higher price ranges, paying that much is bonkers, imho.

[MikeJaquish]

Originally Posted by southdreamer

We gave 1500 DD and found out later that house is near quarry, so we changed our mind about the house and seller kept our $1500. It wasnt multiple offers situation thought...We didnt try yet putting another offer, so I am not sure if 1500 is a good DD, but thats what worked for us.

So, you have an agent who helped you throw away $1500 on a DD Fee because they either did not know the area, or didn't bother to check the area prior to writing an offer?
Unbelievable.

[MikeJaquish]

Due to market perceptions and stigma attached to failed contracts, sellers can take a real hit from buyers who enter into contract cavalierly.

One seller motivation for getting a DD Fee is to assure that the buyer has substantive reason to be serious.