Buying A Home
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
How much earnest money?
What is the etiquette for amount of earnest money? I have always put down $1k but my realtor made a comment about a certain percentage of sale price? I read that it depended on the market...in a strong market you typically put a down a percentage but in a weak market that wasn't necessary. Just wondering what everyone else has done? TIA
Re: How much earnest money?
I am not sure if there is a rule of thumb. Our earnest money was about 2% of our eventual sales price.
ETA: We didn't calculate it as a percentage when we made the deposit. We just put down a strong amount because the house had some other interested parties and we wanted the seller to know it was a good offer.
Acceptable earnest money deposits vary by location.
In my area, $1K is pretty standard.
Your earnest money is different from your down payment, but should be applied towards your down payment and placed into an escrow account. So if your DP is supposed to be $10K and you put $2K down in earnest money, at closing you should only have to bring $8K for your DP and your $2K in escrow will be applied towards the total down payment.
I just asked our agent because I was curious, too. She said when the real estate busines was flowing well she usually said $5000 but now she does $1000-2500 (or more to show how serious of a buyer you are if there is competition).
Maybe it just depends on the realtor.
We were told to bring 1% to provide with our offer letter, then up to 10% when the offer was accepted to hold in escrow until we provided the remainder of our downpayment upon close. We're in a HCOL area so both those percentages were well over $1-2k.
Our offer was never acepted so I can't speak to how it actually plays out.
My Valentine Bookends (2~13~13, 2~15~09)
When I bought my first house, most realtors and friends who bought recently (mid-2000s) recommended 3%.
For this house, my realtor recommended 1%.