What is the normal amount of earnest money to put down on a 3.3M multifamily?

In Buying Property - Asked by Nick N. - Aug 24, 2009
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Answer(s)

Cris M.
Broker/Agent
Lomita, CA

Hi Nick--
Earnest money is usually at least 3%-5% (which would be approx. $100,000-$150,000 in your case). Total Down will probably need to be at least 30%-35% in this market.
Good Luck!
CrisRE@aol.com

Aug 24, 2009
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Shane G.
Broker/Agent
Tallahassee, FL

The amount of earnest money will vary from deal to deal. The amount of money isn't really that important since it is almost always refundable until the end of the due diligence period anyway. A $10,000 deposit is usually sufficient on most deals, even large deals. Seller may stipulate that more deposits be made along the way toward the closing date, but most knowledgeable participants understand that the initial deposit is almost immaterial in the larger scheme.

Aug 25, 2009
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Bert W.
Broker/Agent
Austin, TX

Sellers like to see a bunch and Buyers usually want to put down only a minimal amount. The truth is unless it is a non-refundable deposit then what does it matter.
Also know if buyer is spending money in the feasibility period of inspections, travel, appraisal or bank fees then it is not exactly a free look for the buyer. With that said a minum of $5,000 and then add to the amount as the deal progresses with some or all of the deposit going hard at some point in time.

Aug 26, 2009
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Joe R.
Broker/Agent
Mission Viejo, CA

$25,000 when escrow opens. An additional $75,000 after due diligence period expires -typically 45 days. Once due diligence period expires all funds are non-refundable unless due to the Seller breaches. There should also refundable deposits for extending beyond the contractual COE. Perhaps $50,000 for each 30 day extension.

Aug 26, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Depends on the deal but 10 to 50k generally.
http://www.gregorygarver.com

Sep 1, 2009
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