San Mateo County Home Buying

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Pucker Up
When you go on a date, you put your best outfit on, fix your make-up and hair, take extra time with your lipstick, put on perfume…When you write an offer, you have to do the same thing.
Often when I work with buyers,  I’m asked why it’s so much, where does the money go, and oftentimes: Can I deposit less?  Yes and no. If you want the house and you want to show that you have the means to buy it, you’ll deposit the 3%.  There are many things, other than the purchase price, that make an offer appealing.  The amount of the deposit is one of them. 

Classy, Not Trashy
Every area has its customs.  In San Mateo County, the standard deposit check is 3% of the purchase price.  With all contracts, there must be consideration.   

The reason for the 3% is that the agent representing the seller wants to insure that you have the ability to purchase the house.  If you don’t have that 3% it’s going to create doubt that you can actually can go through with the sale.   

Secondly, there’s a liquidated damages clause in the contract which, in essence, states that if you should default from the contract after you have removed your contingencies, the seller may sue you for damages.  What’s the most they can get out of you?  3% of the purchase price.  The seller’s agent is going to try to make sure that all that money is available to their client should you change your mind later than you should have. 

We’re Not In Kansas Anymore
In some areas, the standard is $1000 or maybe $5000.  That’s usually where the houses aren’t so expensive.  In the San Mateo area you’re talking about a $750,000 median price.  Asking a seller to hold their property for you for 500 or $1000 isn’t going to make them warm and fuzzy and isn’t going to encourage them to take your offer.

Those funds are held by the escrow company; a neutral third party who actually takes instructions from you!  Well, from me, but I work for you.  If you and the seller don’t agree, then the money doesn’t get released.  It stays in that account until you come to an agreement. 

Yippee!
Once all of the pieces of the contract have been completed – inspections, appraisal, loan approval, etc – the money is delivered to the seller and the keys are delivered to you.  (It’s not really THAT easy but you get the idea.)

Congratulations!

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Vicki Moore About Vicki Moore

Office:
RE/MAX Star Properties
282 Redwood Shores Parkway
Redwood Shores, CA 94065

By Phone:
650.888.9268

Comments

  1. Interesting that you only take 3%. Comparing if the house is selling for 1.3 million a $100,000 deposit would be considered acceptable. We try to get 10% by using a two step process so much at writing and the balance when conditions are removed.

  2. Vicki Moore Vicki Moore says:

    We used to do that as a practice – a portion up front and then the balance after contingencies were removed. But that standard changed a few years ago as the competition to purchase a home increased. I haven’t seen it go back to the old way. Sometimes buyers will want to put more down as a way to improve the appeal of their offer. But the liquidated damages is limited to 3%. 10% is huge. Not a lot of people have the much cash lying around.

    BTW, thanks for the comment. I welcome agent comments here. :)

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