Legal Question in Real Estate Law in New Jersey

Use caution here. It is unusual to give a 20% downpayment if what you mean is money that the seller gets prior to settlement. At settlement, the seller should not care where the money is coming from. To tell more, I would have to read the contract and know more about the deal.

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First I would have to see the contract. Unless there was a provision in the contract requiring 20% down payment the contract should still be enforceable.

I interpret your question differently that the first 2 responders. You appear to be saying that you have made an offer to purchase a property, and that there is no contract yet. If I understand you correctly, the seller won't enter into a contract to sell the property to you unless your deposit is 20%. The seller apparently wants to know that you are a serious buyer who has the financial ability to purchase the property. The deposit must be held in escrow pending settlement. If your mortgage was ultimately 90% (let's say), then you would simply receive back the excess deposit at settlement. Nevertheless, typically the type of mortgage you are pursuing would be stated in the contract, so it would not be typical to give a larger deposit than necessary. Is a realtor involved? As part of your offer to purchase, perhaps you might consider showing the seller that you have been pre-approved for a particular mortgage. The seller is not obligated to accept any offer that the seller does not want to accept. Prior to a deal being made, sellers are allowed to be foolish or unreasonable if they wish. I suggest that you negotiate appropriately, and strongly consider obtaining an attorney to review any contract for you. Under no circumstances should you tender any deposit that will not be held in escrow by a reputable escrow agent such as a reputable realtor's office or law firm.

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