Is 10% earnest money on a new construction unreasonable?
J, Unlike some of my Chicago colleagues I view 10% as high. Except for extraordinary circumstances 5% should be sufficient. For example – last week we accepted a contract on a $1.6MM sfh and were comfortable with $50k earnest money – later this week clients close on $550k condo where we put down $25k in earnest money. With new construction extraordinary circumstances include upgrades and changes. It is not unusual for the developer to require you to put down a non-refundable deposit of half the cost of the upgrade or change order. Having said this you are best served working with both a professional realtor and a skilled real estate attorney. Best of luck with your purchase.
