“How much deposit do I need?” is a common question from home buyers. As my average sales price is $300,000, my average deposit is about $5,000. If a buyer does not have $5,000, for any reason, I don’t make a big deal about it. I don’t make the buyer feel inadequate or embarrassed. However, some folks do. I have witnessed the following recently:
1. Some buyers have near-zero deposit, or just a $1,000. Humble sellers understand this. Busy real estate attorneys get it. Some buyers truly do finance 100% of the price, because they have no money, but good credit. This does not make them a bad buyer.
2. In “North Jersey”, the CEO of my past company referred to the deposit as “The 10%”, as if every buyer has $50,000 just begging to jump out of their checking account.
3. My office recently had an agreement (signed contracts) with another agent, and the seller refused to sign them because the buyer’s deposit on a $355,000 sale only included a $5,000 deposit. The seller demanded a deposit of $8,000. As if…
4. A local attorney for a buyer of one of my listings (he is what you may call a “Hoity-Toity” kind of guy) recently told my agent we should be embarrassed for accepting a $5,000 deposit on a $400,000+ sale. Guess what? It’s not 1955 anymore!
Now, for a dose of reality: After selling hundreds of homes, I can tell you it’s simply not true that a bigger deposit “keeps the buyer from backing out” or whatever other goofy myth you may think. If a buyer wants to get out of a deal, they’re going to have their crafty attorney do it, using a contractual loophole.
More important that a big deposit, make sure your buyer is grounded emotionally, and loves your home.