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Escrow Deposit Calculator
Commercial PSA deposits typically 1–5% of purchase price with stages.
Total deposit
$400,000
Initial deposit
$100,000
Hard deposit
$200,000
How the math works
Total deposit = (initial + hard + final) × price.
$10M × (1% + 2% + 1%) = $400,000 total deposit by closing.
How to Use
- Enter purchase price.
- Enter initial deposit %.
- Enter hard deposit %.
- Enter final deposit %.
- Read total deposit.
Frequently Asked Questions
Commercial deposit structures?
Initial deposit (good faith): 0.5–2% of price, fully refundable during due diligence. Hard deposit (post due diligence): 1–3% of price, non-refundable except for seller default. Additional deposit at financing contingency removal: 1–2%. Total deposits at closing: 2–5% typical. Held by title company or escrow agent. Time-bound: each phase has hard deadline (45/60/75 days typical). Seller protections: deposit forfeit if buyer defaults; specific performance available with deposit credit.
How does this affect deal economics?
Transaction economics — closing costs, escrow holdbacks, post-close true-ups, broker comp, title savings — directly reduce buyer or seller proceeds. Often 1–4% of deal value cumulatively. Allocate deliberately in PSA negotiation. Reps and warranties insurance (RWI) becoming standard for $20M+ transactions to backstop indemnification.
Standard market practice?
Major markets follow ALTA closing protocols. Buyer typically pays: lender title, recording fees, half escrow, half conveyance tax (varies). Seller pays: owner's title, broker comp, half escrow. Mortgage recording tax (NY, FL): substantial. Transfer tax (CT, DE, NJ, PA): 1–4%. Allocations negotiable but standard market practice limits negotiation leverage.
Risk allocation?
Holdbacks and escrows backstop seller indemnities for representations and warranties. Standard: 1–2% of purchase price for 12–18 months. Larger for: leasing risk, environmental, litigation, tenant credit. RWI shifts indemnity to insurer (1–4% of policy limit premium). Use earnouts for performance risk on operating businesses or stabilizing assets.
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