Earnest Money on a Commercial Real Estate Deal

[John Bowen]

What is the normal percent of earnest money deposit on a commercial deal? Agreed offer is $900K and the seller sent their own contract asking for 15% intial deposit for the Title company escrow instead of returning the letter of intent.

[Sharetha H.]

John--
I think the bank allowing you to use your $15K as equity is a plus. I used to be a commercial underwriter and typically when we said that, that meant that the borrower was allowed to use any out-of-pocket expense towards their equity injection. So if you are required to put in $90K total, already put up $63K for EMD, and $15K for expenses, you would only need to bring $12K to closing.