$3500 Earnest Money Counter Offer?

[Rhondalette W.]

Hey BP, I made an offer on a SFR potential rental property for $104K in my offer I suggested $100 option fee for 10 days and $1000 earnest money. They countered back with same price $104K but wanted $3500 earnest money and only 7 days option period. Why would the sellers want so much in earnest money? How does this benefit them? Will the full amount of the earnest money be applied to the price of the home? I am confused...

Can any of you explain earnest money and the related rules?

[Samantha Klein]

I'm not in TX but it would generally benefit the seller to have a higher earnest money dep because then they feel your offer is stronger than someone who is only putting down 1k in EMD. The EMD will then be subtracted from what you need to bring to closing for example, if you're putting 20K down, you only need 16.5K at closing because the other $3,500 will be in escrow to be applied at closing.