Legal Question in Real Estate Law in New York

Re: Deposit Purchase & Sale

There is no legal requirements as to the deposit amount. Many lenders may require a 20% deposit if you are taking out a loan for the purchase. Otherwise, 10% is a very common deposit amount. The deposit is most often determined by what you can afford and what the seller will agree to.

The larger the deposit is the larger the incentive for the seller to accept your offer to purchase because, you are at an increased risk of loss if you breach the contract.

Re: Deposit Purchase & Sale

I agree with Chris, there is no legal standard, just traditional which is 10%. However, the amount or percentage is usually negotiated between the parties and many factors are considered, such as how long the funds will be held before the closing, will interest be paid on the deposit, is the transaction all cash or will a mortgage be required and how much time is given to get one, what contingencies are there that need to be satisfied, and a host of other issues. I have had many deals where only a specific dollar amount is deposited and some where only 5% is deposited.

: Deposit Purchase & Sale

There is no standard. It is what the parties negotiate. 10% is not unusual.

Re: Deposit Purchase & Sale

It varies but usually 5%-6%, and less if it is an FHA transaction or a high mortgage transaction,