Increased Minimum Earnest Money Requirements

[Joshua Dorkin]

I heard from a friend last night that he was required to put down almost $8,000 in earnest money on a home he was putting an offer on, and decided to dig a little deeper. It seems that most of the properties he was looking at had minimum earnest requirements starting there and climbing up to $15k and even $25k. Even when I was a real estate agent in Los Angeles at the beginning of the bubble, I couldn't imagine such crazy requirements to make an offer.

Since I haven't really looked at MLS listings in a bit, I was pretty shocked. I suppose it is a sign of the times . . . . sellers are scared that they are going to fall out of escrow, so they place incredibly high barriers to entry.

Do you think that this is an effective strategy and have you seen similar things in your areas?

Share your thoughts....