Securing Real Estate Deals: The Power of Hefty Deposits
By OPLawSocialMedia on Business & Business Attorney
The video features Roy Oppenheim, from Oppenheim Law, emphasizing the importance of substantial deposits when selling a property. From the seller’s perspective, a larger deposit ensures that the buyer is committed to the deal. A nominal deposit may not provide sufficient incentive for the buyer to see the transaction through to completion, as they may not feel significant loss if they walk away from the deal. Thus, a substantial deposit acts as an assurance of the buyer’s intent, compensates the seller for their time and effort, and increases the likelihood of closing the deal.
For deals around half a million dollars, for instance, a deposit of 10% or $50,000 is recommended, potentially split into two installments before and after due diligence. Small deposits might signal that the buyers are not serious, possibly just trying to flip the property. Especially for realtors, bringing a buyer with a hefty deposit not only secures the deal but also builds goodwill in the real estate community. A real estate transaction with substantial deposits demonstrates sincerity and commitment from the buyer, ensuring a smoother process.
A potential title for this could be: “The Importance of Substantial Deposits in Real Estate Transactions: A Win-Win for Both Sellers and Buyers”.
Hi. Roy Oppenheim from Oppenheim Law. I want to talk today a little bit about why it’s important if you are selling a home that you get a proper size deposit. If you have a buyer, and they’re only giving you a small deposit, and you’re the seller, the problem is that if the buyer walks, all you have is this nominal deposit. You want to have a substantial deposit, so that if they do walk, A, they’re gonna feel it. B, you’ve actually gotten some consideration for the time and effort that they have caused you, and C, the bigger the deposit, the higher the likelihood that you’re going to close.
They have skin in the game, and that skin is going to keep them moving forward. If they have a nominal amount, I mean, I haven’t seen closings for a half a million dollars where someone puts down $5,000, no, if it’s a half a million dollar closing, they should be putting down probably 10%, $50,000 or maybe $25,000, and then after due diligence, another $25,000.
But you know, where people are financing 95 or 99%, which is not 99, but let’s say 95%, and they put down $5,000 or $10,000, it’s not really enough. I mean, they may just be there trying to flip the property, and they’re not serious buyers. So, you want to make sure that you have serious buyers.
The way you make sure you have a serious buyer is you get a serious deposit. And I want to just tell realtors this specifically because a lot of times they’ll bring a buyer, and then they don’t have a lot of cash, and they’re not putting down a big deposit. And so, they’re fooling themselves, they’re spending all this effort, all their time, and they’re not gonna build goodwill in the real estate community if the seller ends up not closing. Now, if you’re representing the buyer, and the buyer may be happy with you, but they’re not making you money because every time they do this, it doesn’t close. So, let’s get real deposits, and let’s get real. Roy Oppenheim “From the Trenches.”