Savings. We came up with 20%. Never sold first home- kept as investment property.

Anonymous wrote:

Anonymous wrote:How did we afford it? We bought a house lower priced/payments that we could afford so just in case something happened, we could still manage. We saved and saved and saved and were able to put down 20% (and had a little bit of family help). How could we do it again... we save and save and save and live under our means.

If you put down 20% for earnest money, you are a total fool. And screw you for lecturing other people about what they can and can't afford, when you had to take money from your family to afford a home.

Finally, you're a simpleton if you don't understand that intelligent people don't sit around with hundreds of thousands of dollars in their pissy little savings account--ever heard of investments?

Once again, people are confusing earnest money with downpayment. Completely different things, people.

Anonymous wrote:How did we afford it? We bought a house lower priced/payments that we could afford so just in case something happened, we could still manage. We saved and saved and saved and were able to put down 20% (and had a little bit of family help). How could we do it again... we save and save and save and live under our means.

If you put down 20% for earnest money, you are a total fool. And screw you for lecturing other people about what they can and can't afford, when you had to take money from your family to afford a home.

Finally, you're a simpleton if you don't understand that intelligent people don't sit around with hundreds of thousands of dollars in their pissy little savings account--ever heard of investments?

We did $18,000 on a $550,000 house because we couldn't sell our previous home in another city (rented it out but we had no cash out of it) and needed all of our cash to redo the home (needed $100,000 to even start renovation) We bought a foreclosure and bank paid closing costs.

We refinanced in a year and the house appraised high enough to avoid having FHA loan. We did lose the $10,000 that the FHA costs at closing but we had no choice.

We just purchased a $900K house and put down $50K EMD. I think it did make a difference in our getting the house. The people who purchased our house also put down 5ish% EMD, and that is why they got our house--- it made us feel like they had more skin in the game than another offer which put down only 2%

That's why you put in home inspection and financing contingencies, so that if you have to walk based on these, you don't lose your EMD. Of course, if you forgo these contingencies, don't put down more EMD than you can stand to lose.

I agree w PPs. Big EMD indicates interest and ability to buy, but you can also LOSE the EMD if you back out of the purchase.

So only give EMD that you CAN live without in case you lose it. (Very rarely, but last minute inspections can surprise you and with the contracts lately, sometimes you can't escape it).

We are under contract in Mont. County. We put about 3% down but our realtor said we could do less if we wanted. We were competing with other offers so we bumped it up. We used our savings.

It seems many people do not understand the difference between earnest money deposit (EMD) and down payment. EMD is the check written at the time an offer is made, often then held in trust by realtor or title company, and the buyer is essentially willing to give up to the seller should the negotiations fall through and no sale is made. Down payment is what is given to the mortgage company upon closing. EMD can go toward the down payment or closing fees when closing occurs.

could also be a home equity line on their current house. I had a $40K line of credit on my previous house. The rate was at 2.49% so I used it as a source of quick, cheap money when I needed it for renovations. I had to put down $10K on my current house and I used the HELOC, which was then paid off from the proceeds of the house I sold.

I would question whether an emd of over 5% could be upheld in court if the buyer backed out. The emd has to be reasonable and proportionate to the actual harm, and I doubt a seller incurs 10s of thousands in losses because a buyer backs out. If the market is so hot that they can demand such a high emd, then they can surely quickly find another buyer. Even 5% seems excessive to me.

Anonymous wrote:EMD only protects the seller and the realtor to force you into the deal. You want to EMD the lowest possible.

Depends on the market. If there are a lot of buyers and few homes--like the market in upper NW right now--you want the deal. EMD can work both ways.

EMD only protects the seller and the realtor to force you into the deal. You want to EMD the lowest possible.

Your realtor needs to be able to read the situation.

We put 10% down on a house that was listed for under $700K in CCDC that was in very good condition. This is because our realtor knew that 1) the sellers were opt to choose the buyers with the strongest financials as they were moving out of the DC area; 2) there were multiple bids.

From what I understand, another bid was about $10K higher than ours, but we won the bid because we were able to show that we had a lot of cash on reserve and because we had a conventional 20/80 mortgage.

In a market with low inventory and high interest, especially for a house that is well priced and in good condition, a high EMD shows that you are serious prospect.

When people are preparing to buy these days, lenders look carefully at whether you do have enough cash reserved on hand, if you can afford closing costs, and if you have enough of a safety net *in addition* to the 20% downpayment.

5-10%? No way. We put down 3% on our close-in $1M MoCo home (closed 2 weeks ago), and asked the same from the buyers of our $400K NW DC home (closing this week).