How much deposit should I give when purchasing

How much deposit should I give when purchasing

“How much deposit should we put down?”  This is a question many realtors get when servicing their clients in the Dover real estate market.  There is no one answer fits all situations.  It could depend on many factors such as the demand for the property, what the buyer can afford, the buyers motivation, etc.

Typically, the higher the deposit is a good faith gesture to the seller.  It tells the seller the buyer is very serious about purchasing their home.  Many times the deposit is split into two parts.  The initial deposit (upon signed contract) and then a second deposit after a satisfactory home inspection.

As a buyer, consider how much you want to tie up.  A small deposit is not necessarily a negative sign or indicate weak interest with the property.  Some buyers have limited funds or prefer not to be out of pocket much up front.  The less they can put down the more money they will have after the close for items like new appliances or furniture.

Finally, if your a buyer the down should match your comfort level.  As a seller, the more the buyer puts down the better.  The down payment motivation is different with the seller.  Sellers want buyers to have as much skin in the game as possible.  Ultimately, if the buyer decides at the last minute (after tying the property off the market for months)  they don’t want the home they will less likely walk away from 10k then 1k.  If they do walk away from 10k the seller is compensated well for lost time off the market.  Always best to consultate a real estate professional when purchasing or selling a home.