Earnest Money

[George Ramsay]

My and my agent have a bit of a disagreement regarding earnest money when submitting offers to bank owned properties. She is trying to minimize risk and believes that a maximum of$500 is all we should offer. My thoughts are that in order to be taking seriously we will need to offer at least $1000 if not at least 5% of the offer price.

For the most part I think that trying to chase around bank owned properties is mostly a waste of time. I find that if banks don't get what they want after 6 months or a year they throw it to auction anyways. But would be curious to hear other investors thoughts.

Thanks!

[J Scott]

First, you're not actually going to commit the earnest money until you have an accepted offer (they might ask for a personal check before then, but they won't cash it). So, you don't even need to provide EM until an offer is accepted.

In terms of amount, $1000 is pretty standard. For financed offers, most banks will probably be okay with $500. If you're making a cash offer, you'll want to provide at least 10% in EM.