Earnest money is a deposit made by buyers to prove that they are committed to the real estate purchase. If buyers back out of a purchase without good cause (e.g. can’t get financing, unacceptable inspection) in Chicago, they can lose their earnest money.
Last week one developer in downtown Chicago that my buyers and I visited asked for 10% of the sale price for earnest money with an offer. When I later shared with him that my clients won’t have that amount of cash available until they close on the sale of their house, the developer asked for 5% of sale price with the offer and another 5% due after attorney review.
Another developer asked for no earnest money with the offer, but 10% of the sale price would be due 2 days after attorney review.
I’ve found that resale sellers are often satisfied with a few thousand dollars due at contract acceptance and increased to 5% of sale price 2 days after attorney review, but a seller I submitted an offer to last week countered with a request for earnest money equal to 10% of sale price after attorney review.
Sellers of lower priced resale homes are often satisfied with $1,000 due at contract acceptance.