Dwanderful

SALE!!! Fed Up Program

$997
To  

$499

READY TO START MAKING MONEY? WANT TO SLEEP SOUNDLY AGAIN? HOW ABOUT PLANNING THAT DREAM VACATION, SHOPPING JUST FOR FUN, ORR EVEN MAPPING OUT YOUR RETIREMENT?

Take the FREE Real Estate Investing Quiz to take back control of your time and goals. Your path to success starts here!

Ready to start making money? Want to sleep soundly again? How about planning that dream vacation, shopping just for fun, or even mapping out your retirement?

Take back control of your time and goals with my FREE Flipping EBook and Short Sale EBook. Your path to success starts here!

How Do You View A Good Faith Deposit?

In a real estate transaction, a touchy issue is how much trust the seller has in a buyer. The existence of a good faith deposit helps put a seller at rest.

Good Faith Deposit

If you are selling your home, condominium or other real estate, you should always require a buyer to make a good faith deposit. The good faith deposit simply establishes that the buyer is serious. This, to some extent, has the financial capacity to follow through on the purchase.

The amount of the good faith deposit is dependent upon the agreed sale price of the real estate. Although percentages vary from state to state, a cash deposit equal to three percent of the sales price is typical. For instance, the deposit would be $9,000 for home selling at a price of $300,000. As with most transactions, this percentage is negotiable. I don’t recommend that you accept anything less than two percent.

Once the buyer and seller agree to the amount of the good faith deposit, you have to figure out what to do with the deposit. Importantly, the seller should not hold the deposit as doing so could make the buyer very uncomfortable. Instead, the money should be deposited with a third party and held “in trust.” Potential third parties include escrow and title insurance companies as well as an attorney if your state requires their involvement.

Consider it an Insurance Deposit

A good faith deposit acts like an insurance option for a seller. Moving through escrow can take 30 to 60 days, during which the property is off the market. The good faith deposit essentially compensates the seller for this time in the event the buyer is unable to follow through on the purchase of the property.

Depending on the laws in your state, a buyer who can’t close will lose the deposit. Typically, there is only one exception to this. That is when the seller allows language indicating the deposit will be returned if the buyer can’t get a home loan. Of course, including such language can open the seller up to repeated frustration when bad credit buyers repeatedly fail to get funding.

Good faith deposits are a fundamental part of a real estate transaction. Buyers should expect to pay them and sellers should demand them.

#dwanderful #dwanbenttwyford #billtwyford