“How much money is required for a deposit to buy a home? My friend says not to give a deposit over $1,000.”
***ANSWER:
The initial deposit is also called an “earnest money deposit.” $500 doesn’t sound terribly earnest and makes your offer look weak, hurting your chances of getting the home you want. Not what you want. Typical deposits are 1% or more, sometimes up to 3%.
When I teach courses and seminars on buying real estate, I give a list of low- or no-cost ways to make your offer stronger. Topping the list is a large deposit. All you lose is a few bucks on interest. …Of course, the money is at risk if you default, so don’t default!
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