Watch for This One Overlooked Number if You Get an Offer on Your Home

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If you’re selling your home, there’s a crucial number you need to pay attention to. Read on to learn why a buyer’s deposit matters for you. 

When you are looking for someone to buy a home you’re selling, chances are good that there are a few things you’ll focus on when you receive an offer. Of course, you’ll probably take a good look at the sale price to see if it’s fair and if it provides you with enough money to pay off your mortgage loan. You may also consider the closing date to ensure it’s on your schedule, and will probably take a close look at what contingencies the buyers have put in the contract, such as an inspection or financing contingency.

There’s one number that’s often overlooked, though, and it is an important one. It’s the deposit that the potential buyers offer to put down on the property. This money will go in an escrow account until the transaction is completed, and it’s vital you look at it. Here’s why.

Your buyer’s deposit protects you

There’s a simple reason why you need to pay attention to the buyer’s deposit when they submit an offer to buy your house.

As soon as you accept an offer on your home, you must switch the status of the property to Pending on the Multiple Listing Service (MLS). This means any potential buyers will see it is no longer active, and most people will be unwilling to even go and take a look at it because they assume the current sale will go through.

You’ll essentially lose the chance to find other interested buyers once your home goes to pending. And that’s OK, as long as the buyers actually move forward with the purchase. It becomes a big problem if they don’t, though, both because you’ve lost time in the process of trying to sell and because having a property go to pending and then come back on the market can make future buyers concerned that there’s something wrong with the house that caused people to back out after they made an offer.

You don’t want to take the house off the market for someone who isn’t serious about buying it. Now, you’re likely going to have to accept some contingencies on the offer, such as a buyer making the sale conditional based on an appraisal and an inspection. But if those contingencies are satisfied, you don’t want the buyer to just be able to walk away from the deal and their pending mortgage loan because they changed their minds.

Their deposit is what stops that from happening.

Don’t leave yourself without recourse if the buyer doesn’t fulfill the deal

A deposit protects home sellers because if the buyers don’t follow through on the deal (for some reason other than not satisfying the contingencies), the buyer forfeits the money.

The larger the deposit the buyers put down, the less likely they will be to just walk away from the sale. If they hardly put anything down, they may be more inclined to just opt out of closing if they change their mind or some other house comes on the market in the meantime that they like a little better.

While you can sue a buyer who doesn’t follow through without justification, that’s a lot of hassle, and most people aren’t going to go through all that. So, a larger deposit is the best chance you have of deterring buyers from not keeping up their end of the bargain.

You’ll want to make sure the amount is large enough to serve as an effective deterrent to protect your interests. Usually, a few thousand dollars is enough, but if it’s a large transaction, you may want to hope for at least $10,000 to $20,000 at a minimum to make sure walking away would hurt.

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