earnest deposit = $$ ?

I read in instructional books that $10 is enough for an earnest deposit , how ever i have heard from REA's that atleast 1% is need. What are the facts? confused
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Comments(5)

  • vincenth13th May, 2003

    It is whatever the seller and/or their agent believe to be a fair amount for earnest money. Could be a $1 dollar or $1,000 dollars, whatever they will accept for accepting your purchase agreement. Best of luck to you.

  • JohnLocke13th May, 2003

    Soon_2B_Rich,

    Glad to meet you.

    In the type of investing I do Subject To $10 is all that is required to tie up the deal.

    I don't know what these other investors methods are, but certain methods of investing only require $10.

    Welcome on board this board, of course I buy some properties for only $10 bucks out of my poscket so I like my method the most.

    John $Cash$ Locke

  • wgheisler13th May, 2003

    Soon_2B_Rich,

    REAs expect at least 1% because that is traditional when buying properties in a traditional way.

    Investors are not in the business of buying houses in traditional ways.

    Those who have a house problem and are motivated to sell, want to have their problem solved. Period. If an investor offers a deal that will work to their advantage, they are usually willing to accept $10 or $20. I tell them “because legally I need to give you some consideration, or money, to make the contract legal.” I usually give cash noting it as cash deposit on the agreement. I also make it non-refundable because I don’t want to confuse the issue with refund contingencies or refund stipulations.

    If your trying to do investor type deals through an REA, good luck. You would be better off advertising for motivated sellers who will CALL YOU in response to your ad.


    wgheisler

  • hrash14th May, 2003

    when I buy from motivated sellers, I tell them that I need to give them some deposit to make the contract official. That would be $10. When I work with agents, I give them close to %1.

    Some banks REO require $1000. So it all depends on the deal.

  • Soon_2B_Rich14th May, 2003

    Thank you all 4 the words of wisdom.
    [addsig]

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