As a rough guideline, the deposit should be 1 to 5 percent of the sales price. Be sure the deposit is not given to the seller, but is held either in the realty broker s trust account or by the party who will be handling the closing, such as an attorney, bank, escrow or title firm. Liquidated damages clause. Many home purchase offers contain a liquidated damages clause. Since the exact damages will be hard to determine if the buyer defaults, the buyer and seller can agree in advance on the amount the buyer must pay to get out of the contract.
Some state laws limit the maximum liquidated damages.
For example, California sets the limit at the lesser of 3 percent of the sales price or the amount of the buyer's good faith deposit. Professional inspection contingency clause. Smart home buyers insist on their approval of a report by a professional home inspector. Many buyers of even brand-new houses now insist on hiring a professional inspector to check for faulty construction. It's best for the home buyer to accompany the inspector to discuss any defects discovered that the seller did not previously disclose.