Earnest Money – How Much is Enough?

P.S. – For some reason this video appears if you are using Chrome (and some other browers) but not if you are using IE.

This entry was posted in Agent Advice, Buying/Selling, First Time Buyers by ARDELL. Bookmark the permalink.


ARDELL is a Managing Broker with Better Properties METRO King County. ARDELL was named one of the Most Influential Real Estate Bloggers in the U.S. by Inman News and has 33+ years experience in Real Estate up and down both Coasts, representing both buyers and sellers of homes in Seattle and on The Eastside. email: ardelld@gmail.com cell: 206-910-1000

50 thoughts on “Earnest Money – How Much is Enough?

  1. Hi Jerry,

    Thanks for the heads up. It is a video and comes up on my computer, but not on Kim’s. It’s a new site I am trying for videos called Extranormal.com.

    I had trouble getting it to load into the post, and Dustin helped me with that. I think I may have to move it to YouTube from Extranormal and use the YouTube embed code.

    I had it on my blog but when I changed something I could not get it back in/on. Here’s a direct link for now and I will continue to work with the glitches as I plan to do a full series of these.

    In the meantime here is a direct link to it. Would appreciate your letting me know if this works for you.


  2. Thanks Ria,

    I would use a tool like Slidebuddy showing the actual provisions in the documents, but mls rules prohibit my showing the proprietary documents in whole or in part.

    Hoping to have a series of these explaining all aspects of buying and selling. I think they convey the info fairly well without showing the actual documents. I may be able to use SlideBuddy for sellers and home preparation issues.

    • A- It’s greatly improved- with all your
      masterful editing touches plus a much
      better picture illustrating my point that
      there’s more to designing houses than
      sticking lumber yard white trim all over
      the outside. We’d never let our cars be
      designed by the mechanics putting all
      them together and our homes shouldn’t
      be designed by carpenters no matter
      how skilled they may be.

  3. Glad to be of help, Jerry. Though I have to say that I think it’s a great house! The “curb appeal” of a house that’s “hiding in the trees” and blending in with the scenery, is not my preference. I’m a “white trim” fan. 🙂

  4. If the rain is coming down on Friday like it is right now…look for the bright yellow fleece lined parka with a hood. No umbrellas for me either 🙂

    Took me a few years to learn how to walk in the rain…as if it isn’t raining. But I think I’ve got it down pat now.

  5. I like this video. Every buyer should watch this so that they know that submitting an offer isn’t as easy as just telling the selling agent that you want it. It’s important that the buyer keeps the entire process in mind before making the decision to submit an offer.

  6. not sure where to ask, so trying here. I was employed recently for 2.5 years, and now quit and will end the old job on 12/29, and start my new job 12/30, so no emp gap. Will this hinder my attempt to get a loan? my fico is around mid 700’s.

  7. Good Morning, Shawn,

    That’s more of a question for Rhonda, so I’ll give her a heads up and ask her to come over here and answer it for you. I am an agent, so you can ask any agent questions on any of my posts and Rhonda is a lender, so you can ask any lender question on any of her posts.

    That said, My $02 based on 20 years in this biz is it is not a problem unless you are switching fields of endeavor or are primarily commission based income, or even commission based in part. The latter is more problematic if you are moving from one area to another.

    If you were making X dollars as an accountant and have a new job as something completely different, that might be a problem. But if you were an accountant at X firm and are starting a new job as an accountant in Y firm across town…not usually a problem. If you were a real estate agent (all commission) in Texas and your new position is a real estate agent in Seattle…huge problem. Commission based income does not usually “travel well”.

    But if you worked at pure salary income at Google in Kirkland and switched to a pure salary position at Microsoft in Redmond…same basic field of endeavor, no commission or bonus based component…should make no difference at all. If any part of your income is bonus based, you likely can’t use your bonus history at the old job as proof of bonus potential at the new one, so they may count only your guaranteed salary, and not the extra bonus income.

    Common sense, really.

  8. Hi Shawn,
    the only thing I would add to what Ardell has offered that if your type of business is one that depends on an established clientele base (like a beautician or CPA), underwriters may question if your clients are going to follow you.

    If you want to comment with what type of employment you have, I can answer more specifically.

    • Thanks for the “assist” Rhonda. I’m going to write a post on the difference in how lenders look at income from an agent perspective, as it is a topic every agent should know, and most agents and buyer clients do not.

  9. Probably the biggest surprise a borrower (and agent) may have in this situation is when someone has received a promotion at the same company and/or new job/same field but the pay structure has been changed… for example, before they had a salary of $50,000… new position has a salary of $35,000 with a signing bonus of $15,000 (not reocurring) with potential to earn other bonus/commission income. Odds are, the income that would be used is the $35,000. I’ve also seen where someone has received a promotion where they’ve gone from salary to straight commission/bonus…unless the employer is going to guarantee their income in writing, it probably won’t be used when it’s a new structure UNLESS the income is salary.

    I look forward to your post 🙂

    • Now see…that is EXACTLY why I want to write the post from my perspective. I can’t fathom anyone being “surprised” by THAT! I think it is because “we” don’t talk about “it” enough…agents and buyers. So I will write the post the way I understand it, and the way I think all buyers and agents should understand it, and welcome your input in the comments.

      Every buyer and agent should have a “working knowledge” of such things. Time to go back to the “Well-informed Old Days”.

  10. I went from company A Software Engineer salaried to company B as Senior Software Engineer salaried with a $5k boost in salary (not much of a boost, but in this economy how can I complain).

    So, it sounds like I am okay since my situation has improved a bit, and will start looking again in Jan 2011.

    Thanks to all.

  11. Glad we could be of help Shawn.

    You usually need one or two pay stubs from the new company before they will fund the loan, so don’t be in too much of a hurry 🙂 I had one early last year where the main company transferred the home buyer to a subcontracting company in the middle of escrow, and they had to wait for the paystub from the new company before they could close. Wasn’t the buyers fault, so my sellers and I helped to make it all work out well for him. But know that having the job is not enough…you need proof that they have actually paid you 🙂

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