Last Updated on May 1, 2024

How Much Should a Real Estate Deposit Be For A Purchase? | Real Estate Question

By Alan F Macdonald

Short answer:

Typically about 2%

Long Answer:

Deposits are always required, but the amount is up for negotiation. Offering too little can make it seem like you don’t have the funds ready for a property purchase. Offering too much could make you look overly wealthy and harm your negotiation. So what is a reasonable amount to offer? Usually it seems to be around 2%. I find that frequently agents suggest a round number for a deposit. Here are some amounts that I think are pretty reasonable:

Property Price Deposit
$100,000 $3,000
$200,000 $5,000
$300,000 $5,000
$400,000 $7,500
$500,000 $10,000
$600,000 $12,000
$700,000 $15,000
$800,000 $17,500
$900,000 $20,000
$1,000,000 $20,000

Some sellers or their agents will want a different amount and that might be fine. Does the amount really matter beyond optics? Not if the deal goes together properly – then it doesn’t typically matter. If the deal goes wrong, however, the amout is going to be very important to the buyer and the seller. The deposit is refundable if conditions aren’t met –  it is refunded back to the buyer. If the conditions are met and the deal comes together, then the deposit becomes part of the down payment and the down payment is always going to be larger than the deposit. So no big deal there, either. But, if the buyer forfeits the deposit to the seller, that’s where the amount is going to be crucial to both parties. Make sure to talk to your agent or lawyer about the implications of a small or large deposit in different circumstances.

Leave a Reply

Your email address will not be published. Required fields are marked *