Tony and Suzanne Marriott's Phoenix Arizona Real Estate Blog

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The Importance of being Earnest

In our market it is common practice to offer approx. 1% of the Purchase Price as Earnest Money.  This year, we are seeing this number dwindle significantly as Buyers perceive that Sellers are anxious for a contract, regardless of the Earnest Money.

We have to make sure we counsel our Sellers that the Earnest Money is their protection against a Buyer Breach of Contract, and that the amount should take into account the length of time before closing, and their carrying costs, so that if the Buyer does breach at least those costs will be covered.

The Buyers are usually more focused on Purchase Price than Earnest Money, so it's becoming more and more common to include Earnest Money increases in Counter Offers.

About the Authors - Updated 2018

If you are considering a Traditional or Short Sale of your home in Phoenix, Scottsdale or any location in Maricopa County Arizona, you owe it to yourself to talk with the BVO Luxury Group @ Keller Williams Arizona Realty to determine whether Tony and Suzanne Marriott are the best real estate Brokers in the Phoenix and Scottsdale metropolitan area to help you with the Successful Sale of your home.

Tony and Suzanne have personally Listed, Sold and Closed more than a hundred Short Sales with the highest list to close rate in the Phoenix Metro Area!

Tony Marriott - Chief Operating Officer - BVO Luxury Group @ Keller Williams Arizona Realty

Suzanne Marriott - Chief Learning Officer - BVO Luxury Group @ Keller Williams Arizona Realty

Associate Brokers, REALTORS
BVO Luxury Group
Keller Williams Arizona Realty

Comments

I feel that part of the point with earnest money is for it to be enough money so that the buyer would not risk loosing it.  I just got an earnest money check for $500.00.  As the sellers agent I kind of wonder if the buyer really has enough money and is serious about buying the house.   After all the money does go back into the property
Posted by Teresa Boardman (Boardman Realty) over 12 years ago
We also add that we retain half of any recovered earnest money too as our services are worth something too.
Posted by Teri Isner, GRI, CRS, CIPS (Keller Williams Realty at the Lakes) over 12 years ago

Theresa, Sometimes the buyers are serious but are not sure if they will definitely get the loan and understandably do not want to lose too much money if that happens.

I had a buyer like that last week. He is very low income yet qualifies for different grants that he will not receive until the actual closing.

I think the earnest money should reflect a percentage of the price normally. The higher the price, the more earnest money.

Posted by Karen Hurst, Rhode Island Waterfront! (RICOASTALLIVING.COM) over 12 years ago

Teresa Boardman I was remiss in the early days - just now catching up with comments from blog posts since day 1 - thanks for the comment - hope you are still in the 'Rain!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) over 3 years ago

Teri Isner I was remiss in the early days - just now catching up with comments from blog posts since day 1 - thanks for the comment - hope you are still in the 'Rain!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) over 3 years ago

Karen Hurst I was remiss in the early days - just now catching up with comments from blog posts since day 1 - thanks for the comment - hope you are still in the 'Rain!

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) over 3 years ago

Yes still once in awhile. Thank you for the follow up.

Posted by Teri Isner, GRI, CRS, CIPS (Keller Williams Realty at the Lakes) over 3 years ago

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