Q: We’ve made a couple of offers on homes that were not accepted. Each offer was accompanied by a deposit check of 1 percent of our offered price. We since have decided to settle in a neighboring county closer to my work. We stumbled upon a property that seems too good to be true. However, we are now working with a new agent who is insisting that we provide a 3 percent deposit check with our offer. Why the difference between the amounts? The first agent never made a big deal about the size of the deposit. Since it’s all going toward the purchase price, who cares?


A: The seller cares as do the realty agencies involved. Deposits are critically important in any transaction, hence its name earnest money. In fact, had you provided a 3 percent deposit in your other offers, you most likely would not have subsequently found the “too good to be true” property. However, the deposit will take a back seat to its big brother, the down payment, unless the savvy offering party offsets that trend.

A larger deposit is the simplest gambit a buyer can employ to strengthen his or her offer to purchase. It’s all too often underused and unfortunately this powerful selling tool is never explained to potential homebuyers. That’s especially the case now, since most offer presentations are not personally presented, but instead faxed or e-mailed to ill-advised sellers per their reps’ insistence.

Granted, the customary deposit amounts are what I refer to as agent driven. There are 58 counties in California, not to mention the often-overlapping real estate associations in a particular county. The standard of practice within each group and its geographical territory can be polar opposite. Interloping licensees further complicate matters with conflicting board procedures.Regardless whether one is negotiating from a position of weakness or strength, a healthy deposit should always be in play. Also, should a buyer’s potential deposit monies be temporarily tied up, one can use the often-ignored mechanism of an Additional Deposit within so many days of acceptance. The benefits of a large deposit cannot be overstated. There is an old saying: The best offer is not necessarily the best price. (Terms, conditions, buyer representation, etc., enhance the best offer.) Some sellers and their reps know this; many do not, so it’s up to you and your agent to remind them.