Expert: Dottie Worthington - 3/6/2009

Question
How much is a typical deposit on a home contract. who holds the deposit ??

Answer
There is not a typical deposit. It is up to the two parties to negotiate that. The reason it is called earnest money, is it shows how earnest the buyer is about buying the home. The seller is willing to remove the property from the market while you close and possibly miss another buyer if you don't close. Usually the Title Company closing the property holds the money but sometimes the seller ask to have it as non refundable earnest money. If I am working for the seller I like to get at least 10%. If I am working for the buyer, I suggest something close to whatever their downpayment is or 10% which ever is lower.
I hope that helps.