Sellers: Don’t give away your right to collect earnest money

Deposit should be big enough to deter 'buyer's remorse'

The real estate event of the summer
Connect with other top producing agents at Connect SF, Aug 7-11, 2017

DEAR BENNY: Some states such as California have a 3 percent limit to deposit recovery; buyers have the right, if they legally back out of a contract, to secure a full return of up to a 3 percent deposit. Any deposit over 3 percent is not refundable. In California, I have never seen a deposit over 3 percent. --Joe DEAR JOE: I am not a California attorney, but I did a Web search on the issue of the earnest money deposit when you sign a contract to purchase a house or a condo. I am not sure you are correct. While you are right that most deposits in California do not exceed 3 percent of the purchase price, it's not based on any legal requirement. Apparently, sellers sign a provision that they will be limited to 3 percent of the purchase price in the event the buyer defaults. Accordingly, the earnest money deposit rarely exceeds that amount. If I am a seller, I want more than 3 percent should my buyer default. If there is a default, I have to start all over again marketing the ho...