Question:
“How much deposit am I required to make to have a binding contract?”
Answer:
This may surprise you and many readers, but you’re not legally required to make a deposit at all.
While contracts require what is called “consideration” to be valid, that doesn’t mean you need to have a deposit.
Per the good attorneys of the California Association of Realtors:
“The buyer’s good faith deposit in a real estate purchase agreement has no legal significance. It is not required as consideration for the contract because the purchase agreement is a bilateral contract and the mutual promises of the parties serve as adequate consideration to make the contract binding and enforceable on both parties. (Bleecher v. Conte, 29 Cal. 3d 345, 350 (1981).)”
That being said, don’t get any crazy ideas…
Virtually every seller and their agent is going to expect a deposit – typically 1-3% of the purchase price.
