@Mark Walker

2%-3%

@Mark Walker

I'm going to sound like an attorney. It depends. Depends on the market. When I sold my last property in NY, down payment was 10%. In Knoxville, it is 1%.

Also depends on the market cycle. Two years ago, it was higher and sellers wanted money hard day 1 in a lot of markets.

I would ask brokers and property management companies and attorneys in the market

Good Luck!

Gino

 Thank you, yes you sound just like my attorney brother ha.

@Mark Walker

He must be a smart guy with a lot of experience!

The higher the earnest money the stronger the offer. If you feel like there is going to be several offers than it is better to go with a higher deposit. We like to see 5%.

Where I'm at (Minneapolis), anything less than 1% would be considered light. 

You can get away with less if some of it is non-refundable right away or becomes non-refundable after inspection. 

As the broker repping the selling, I always caution sellers on offers with high price and low EM. Those tend to fall apart more easily or lead to a difficult escrow process.

In this market, I'd start with a low figure. $25K and negotiate it in the LOI phase. Two years ago you would need at least 50K hard maybe 100K just to get a signed LOI.

@Mark Walker EM is just 1 of the terms of you're LOI/PA, and thus exactly what one peg's it at all depends on a multitude of factor's.

First and foremost, EM is a "telegraph" of intent, so what is it your trying to say to the seller via you're EM? Are you trying to say your liquid, very serious to close and all but certain on the property at this PA? Than you go BIG on EM.     

Are you "telegraphing" fine, you'll give a PP but need all the contingencies, it's going to be a process of many step's? Than would go "market" with Cavet's too EM. 

The variables are many. 

My BIGGEST concern is that your here asking this question, that indicates to me that your NOT experienced in this segment and that's a dangerous thing. But also don't have an experienced agent/broker shepherding you through this either. That's coming to a gun-fight with a spork.... 

There is far more complex aspects to acquiring MFH than EM. 

 Great advice James. I am new to this asset class and negotiating. I have been contemplating getting a broker. Thank you for the advice.