Legal Question in Real Estate Law in Maryland

Re: contract

There is no maximum amount that a seller is prevented from exceeding in terms of an earnest money deposit. From the seller's standpoint, the more the buyer is willing to deposit, the better chance he'll be motivated to complete the transaction, since the contract, if properly drafted, will provide that the deposit is subject to forfeiture as liquidated damages in the event that the buyer defaults.

The buyer typically submits a written purchase offer in the form of a real estate contract, along with the earnest money deposit. As a seller, if you aren't working with a realtor, you would be extremely unwise not to have an experienced real estate attorney review the contract and make sure it protects your rights. If neither party is working with a professional, and you want to be the one to prepare the contract for an interested buyer, you should likewise have an attorney prepare the contract for you. The amount of the deposit will be part of that document.

Robert Sher