Investor · Santa Rosa, CA · Member since 2015 · 10 posts · 2 votes
1)How much is generally required for earnest money? Is there a state standard percentage of how much money is needed for EMD? (I live in CA, btw.) or is it just negotiable?
2) Can you use a credit card to pay for the earnest money? Or money from a hardmoney/private lender? Or even personal loan? (I have a transactional lender who funds my deals, but was thinking maybe another personal/private/or hard money loan to cover EMD/closing costs for my first deal. I'm sure I can pay the EMD & all closing costs after my first deal.)
3) I know the price varies, but how much are closing costs generally?
Generally the earnest money can be anywhere between 1-2% of the total purchase price, sometimes lower. Based on my experience, the standards normally vary from market to market. Typically my average client deals (250-350k) tend to yield EM deposits anywhere between $1000-$1500. As with anything involving contracts however the EM deposit amount is always negotiable, in which case you may be allowed to deposit less. As far as using a credit card to pay, I know that there's a 100% chance that you'll be required to either deposit a personal check or certified funds to initiate the transaction. As far as the closing costs, they can very anywhere between 2-5%. I normally estimate toward the latter when calculating everything. Hope this helps!