Earnest money in MD - where do buyers come up with 5-10% before selling their previous home?
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Anonymous
| We're new to the area and I undersand custom in Montgomery County is to deposit 5-10% of the purchase price as earnest money when making writing a contract to buy a home. This seems high to me -- it isn't the norm where we're from. We will be able to manage a big downpayment once our current house sale closes in a month. But in the meantime where do I come up with like 75k in earnest money on a new place? Do buyers take out short term loans for this? Am I missing something here? TIA. |
Anonymous
Yes, they have savings. Is it uncustomary to have savings where you come from? |
Anonymous
Thanks for the snark. Actually, I don't have too much saved at the moment. I'm selling a large home worth 1M and most of what we have is tied up in that. Poor economy, a couple of kids in college, and a husband out of work for a while have made things a little tight. We could probably take it out of our retirement funds, but I was hoping to avoid that. Anyway, thanks for your help (not). |
Anonymous
|
Well, you asked a really stupid question.
People save money for EMD. Sorry you live beyond your means, but it's not that hard to understand. BTW, you shouldn't be listening to anyone who tells you to put down 5 to 10% EMD on a millon dollar house. |
Anonymous
| I'm not sure that's true. Hopefully more people will chime in. I think we put 3 or 5 thousand down on a 400,000 house. |
Anonymous
pp: So, 1%, not 5 to 10. Not sure why you're arguing with me. |
Anonymous
That was my first post, and I wasn't arguing with anyone. It's much easier to come up with 1% than 5-10% don't you think? But we bought our house 8 years ago, so I don't know what the standard is now. |
Anonymous
| We bought in 2010 and only put down 1%. |
Anonymous
| New poster here. Where are you getting the information that you have to put down so much earnest money? I've never heard of amounts that high. I think 1% is much more common but I don't know which area you're looking in. |
Anonymous
| OP again - maybe I'm getting incorrect information? Our realtor said that 5% is customary for close-in MoCo and 10% is sometimes done to make an offer attractive. I was under the impression this was much different from NOVA where 1-2% EMD is the norm. It sounds like I may need to do more checking into this from what people are saying here... |
Anonymous
| We did 50k on 1.5 mil home. Coulda done more but were not asked to. Close-in MoCo. |
Anonymous
| I don't think your realtor is correct. We did 2% for our house in close-in MoCo and our realtor (who has a ton of experience in the area) thought that was a strong amount. |
Anonymous
| We just had a contract put on our home in Arlington and the earnest money is $15K. |
Anonymous
| Granted we are in Howard County, so totally different market, but I think we were told 2500 to 5000 for a 500 k home. |
Anonymous
|
2.5% is reasonable. Less than that is not necessarily a serious offer.
Yes, we pulled from places we would have rather not, but we wanted out house more. |