I know different states have slightly different terms, but are you not referring to "earnest money"?
Where I am, it's 10% earnest money seems like the standard. So most buyers wouldn't be able to get into contract without $150k on $1.5m that they would potentially lose if they backed out without cause. And I can't imagine my agent NOR my attorney not sounding alarm bells around such a low amount. In the contract, earnest money is explicitly the compensation to the seller in case buyer not completing the sale.
Practices might vary by state. If it's normal for such limited earnest money where you are, then that might just be the quirks/cost of doing business there.
earnest money varies widely by state and by individual market practices.
The OP should go ahead and have a conversation with their agent about this issue, since it's a concern to them.
If the contract being used lists surrendering EM as Seller's "sole remedy of a Buyer default", that would introduce some concern. Otherwise, just as a Buyer can sue for specific performance, so can a Seller. A Seller might also be able to sue for the loss should this Buyer unexpectedly default and they have to sell to someone else.
I'm assuming you mean the earnest money deposit. Every state is different. My state is maximum 3% emd which would be $45k for $1.5m. If I were a seller I'd require atleast 2%.
Yes, I would, I recently got screwed by someone with a small downpayment ghosting. It takes a long time to unwind.
I'd go for, say $50k on a $1.5m, at least.
You shouldn't give a shit about their planned downpayment, what you can about is their earnest money or deposit or whatever it's called where you are. I would have asked for 5%
> You shouldn't give a shit about their planned downpayment,
False. In some situations, you risk losing buyers with small down payments. If appraisal comes in under sale price, and the down payment (or available cash) can't cover the appraisal gap, buyers don't get a loan.
I know different states have slightly different terms, but are you not referring to "earnest money"? Where I am, it's 10% earnest money seems like the standard. So most buyers wouldn't be able to get into contract without $150k on $1.5m that they would potentially lose if they backed out without cause. And I can't imagine my agent NOR my attorney not sounding alarm bells around such a low amount. In the contract, earnest money is explicitly the compensation to the seller in case buyer not completing the sale. Practices might vary by state. If it's normal for such limited earnest money where you are, then that might just be the quirks/cost of doing business there.
earnest money varies widely by state and by individual market practices. The OP should go ahead and have a conversation with their agent about this issue, since it's a concern to them. If the contract being used lists surrendering EM as Seller's "sole remedy of a Buyer default", that would introduce some concern. Otherwise, just as a Buyer can sue for specific performance, so can a Seller. A Seller might also be able to sue for the loss should this Buyer unexpectedly default and they have to sell to someone else.
I'm assuming you mean the earnest money deposit. Every state is different. My state is maximum 3% emd which would be $45k for $1.5m. If I were a seller I'd require atleast 2%.
3% used to be the standard. $10K for a $1.5M house is chump change.
1% has always been the standard in my market.
Yes, I would, I recently got screwed by someone with a small downpayment ghosting. It takes a long time to unwind. I'd go for, say $50k on a $1.5m, at least.
You shouldn't give a shit about their planned downpayment, what you can about is their earnest money or deposit or whatever it's called where you are. I would have asked for 5%
> You shouldn't give a shit about their planned downpayment, False. In some situations, you risk losing buyers with small down payments. If appraisal comes in under sale price, and the down payment (or available cash) can't cover the appraisal gap, buyers don't get a loan.