Earnest $$$ - Again - Posted by Jaime Raskulinecz

Posted by Paul_NJ on March 19, 1999 at 02:12:01:

OK, GOOD LUCK and keep plugging away!

Paul

Earnest $$$ - Again - Posted by Jaime Raskulinecz

Posted by Jaime Raskulinecz on March 17, 1999 at 14:35:20:

I have made an offer on a 25 unit property that will likely sell for around $550K. I offered $1,000 at acceptance of offer and $1,000 on signing of contract. The owner and broker were not happy about this; I actually started lower and increase to these numbers to make them happy.

I know there’s been a lot of talk about earnest $$ here. But are these numbers reasonable for the size deal we’re talking about here?

Jaime

Re: Earnest $$$ - Again - Posted by Rob FL

Posted by Rob FL on March 17, 1999 at 21:31:41:

Unless the seller is highly motivated, your deposit is very very low. My calculater says 2K/550K = .36% If you were buying a 75K house this might be reasonable. Think of it from the seller’s point of view. Would you seriously consider a buyer of a property that is worth over half a million dollars and all they can come up with for a deposit is $2,000? If I were the seller, I would want at least $10,000 and maybe more, but that is me.

Re: Earnest $$$ - Again - Posted by Paul_NJ

Posted by Paul_NJ on March 17, 1999 at 19:10:20:

Jaime,

I’m glad to see you put a offer in on that building! I hope it is accepted! I don’t see any problems with the way you wrote the earnest money deposit! Good luck!

Paul

Re: Earnest $$$ - Again - Posted by Jaime Raskulinecz

Posted by Jaime Raskulinecz on March 18, 1999 at 10:46:41:

Thanks for the response. Is there any rule of thumb for earnest $$. Like a % of selling price that I can use for other offers?

Jaime

Re: Earnest $$$ - Again - Posted by Jaime Raskulinecz

Posted by Jaime Raskulinecz on March 18, 1999 at 10:49:51:

Yes, we have been going back and forth a few times. I just faxed a letter to the broker saying that if they didn’t accept my offer by 12 noon tomorrow they could consider it withdrawn.

We just saw another property that is back on the market after about 4 years. We saw it back then and liked it but it was a little too rich for us. It still is, but I think we can come up with a creative way to get $$ for downpayment, etc.

Wish me continued luck!

Jaime

Re: Earnest $$$ - Again - Posted by Rob FL

Posted by Rob FL on March 18, 1999 at 17:21:20:

I agree with 5% as a good rule of thumb on the larger deals like that. You have to realize that the seller in this situation is probably an investor himself and is not going to deal with someone he thinks his wasting his time unless his is highly motivated for some reason. On smaller residential like under 100K I would probably shoot for 2% or less. The seller’s level of knowledge and motivation has a lot to do with these deals

Re: Earnest $$$ - Again - Posted by Jim_MA

Posted by Jim_MA on March 18, 1999 at 12:48:03:

The Deposit in my area is generally 5% on a deal of this size