What is your state's minimum earnest money deposit?

[Jesse Ramirez]

If anybody has access to a link or list of the minimum earnest money depsosit required by each state please post it here. If not lets just get a list going of state by state requirements. What does your state require?

Texas requires a $500 minimum.

[Jon Frame]

I have never heard of a State Minimum, I live in Pennsylvania and I know there isn't any here.

As far as I know, that is totally up to the seller to accept or deny whatever you offer. It can be a ham sandwich as long as the seller agrees and it's on the contract. Although I'm not sure how they would put that in an Escrow account. :D

I just copied this from my Online Real Estate License Course I am currently taking:

Contract Terms:
Earnest Money: Cash deposit that shows buyer's intention to carry out the terms of the contract. Example: An earnest deposit can be taken in any form. Cash, check, personal property, a boat, or a diamond ring would be examples of possible earnest deposits that might be used. The key issue here is notification to the seller of the form of the deposit. The seller must agree and understand that the deposit was in the form of “Two Pigsâ€!

[Richard Warren]

I don't think that there is any state minimum. It is a simple matter of contract law. For a contract to be legal there must be "consideration" such as cash or an equivalent. There may be amounts that are customary, but that doesn't make it a requirement.

:cool:

[Jesse Ramirez]

Learning something new everyday. Every offer i made to a bank required a minimum of 500. Was told that was state policy. I guess they meant that was the banks policy in this state.

[Matthew Gil]

The amount tends to change per market at the county-level. There is no required amount per se, but realtors like to perpetuate an old wife’s tale that claims that a minimum amount is required. When in fact, there is no such stipulation in the law.

For example, in the county that I mostly deal in, while no law exists, the de facto minimum amount is $1,000 per contract.

[Matthew Gil]

BTW, all bets are off when dealing with REOs. They have their own policy regarding earnest money. And, they tend to be of the attitude, “My way or the highway.â€

[Will Barnard]

Jesse,
There is no TX state policy that stipulates a buyer MUST place a $500 or more EMD. I have had over 30 TX transactions just in the last 2 years and in many cases, had a lower EMD than $500.

Now, speaking in REO terms, that is a bank stipulation (perhaps) and my advice for making offers on REO's is to ALWAYS offer large EMD's, quick closings, and only one or two contingencies. This way,. you stand a better chance of getting a better price and getting your offer accepted.

[Anson Young]

CO and AZ have no minimums, I saw just this week an offer come in with $150 EM. I called the agent to find out if they left off a zero, they didnt....

[Will Barnard]

As several of us stated, there are NO minimums in any state.

[Matthew Gil]

Like everyone has mentioned, it is an urban myth that there are laws which state earnest money is required for a real estate transaction.

However, there are some states that have laws on how the earnest money (if there is any) should be handled or held in escrow.

[Timothy W.]

I used an unsigned letter of intent as earnest on one Indiana deal. Since it was e-mailed I figure I used a couple kilowatts of power to make it happen so probably about .024 cents on that one.

Basically there's no minimum in Indiana and it's not required at all. With REOs I always submit it with $500 earnest even if the bank says they want $1000. Sometimes they make me come up with it (like Matt said, their way or the highway) and sometimes we take care of it at closing. I'm a repeat customer with some of them so by now they don't care as much. I just bought 2 shortsales with no earnest money - we were closing in 14 days so e.m. was pointless.

Tim

[Ryan Webber]

In Texas at least, there is no requirement of ANY earnest money for a contract to valid and enforceable.

I usually brag that I've only put earnest money on 1 or 2 houses that weren't listed over the last six years but I had a seller on Friday that pushed for it and I gave him $200. So now I guess its 2 or 3 over the last 6 years. :D

As for listed property, my market usually likes $500-$1,000. I normally put $1,000 down on my REO offers, but sometimes I have put more to make my offer more appealing.

[Will Barnard]

So now that the qriginal question has been answered by several here, everyone interested should pay special notice to Ryan's last post and differentiate between private sellers that are non-listed properties, listed properties and REO properties.

He has stated that he has been able to get away with no EMD's on most of his non listed private party purchases, and small amounts on the listed ones, but on REO's, he often places larger deposits to get better results.
EMD's are not universal with all selling parties. Each different aspect calls for a different strategy by you, the buyer.

[Dory Peters]

Wow, Ryan, you're cheap! :mrgreen:

And so am I. I rarely will put more than $100 down--even on REOs.

[Benjamin Cowles]

so what's the main hesitation to leaving a substantial deposit? Having to chase the seller down for it back in case for whatever reason the deal doesn't go through? I've yet to do a deal but I'm considering offering a deposit that indicates some seriousness on my part. What are your thoughts on this?