Question

Seller David requires a 4% deposit on all offers. Buyer Jack wants to offer $115,000 for the property. The property was appraised at $122,000. What must the earnest money deposit be if Jack presents his current offer?

a. $4,600
b. $4,740
c. $4,880
d. $2,340

Answer 1

The earnest money deposit that Buyer Jack must pay on his $115,000 offer, given a 4% deposit rate, is $4,600.

Step-by-step explanation:

To calculate the earnest money deposit that Buyer Jack must pay on his $115,000 offer for the property, the deposit rate of 4% provided by Seller David needs to be applied to the offer amount. The calculation is as follows:

Deposit = Offer amount × Deposit rate

Deposit = $115,000 × 0.04
Deposit = $4,600

Therefore, the correct earnest money deposit for Jack to present with his offer would be $4,600.