Is Escrow based on a percentage of the purchase price? Is it negotiable between purchaser and buyers agent? And what would be the normal escrow for a house that cost $250,000 to $260,000?

I think you mean negotiable between the Buyer and Seller.

A Good Faith, or earnest Money Deposit, is there to demonstrate that a Buyer is serious.

It's there to sweeten the deal, or make that Buyers' Offer look as attractive as possible.

It ought be large enough to appear as being too big for this Buyer to simply abandon in case he were to change his mind, or find something better. In other words, "Big enough to hurt".

I don't know what the usual and customary deposit is in your area; but if you were here, $5000 to $10,000 would be sufficient to show that you're serious; but more would look better. With a Conventional Loan, you're going to be putting $50,000+/- down anyway, so why not have the same money do double duty?

We used to have lots of people tie properties up with a measely $100 or $250 and then walk when they got back home or saw something better. Too little to chase them for.

The problem that I see with escrow in the thousands is that if I were to make an offer tommorow and its accepted, then its possible that the seller may need 3 months before settlement. I am going to settlement on Aug. 31 on my own house and if I combine both time intervals together, there will be 5-1/2 months that my money is tied up in escrow. I do not know if I get interest on that money. Its one of those deals such as "Damn if you do or damn if you don't" because someone may also like the property and put their offer in and escrow. I looked at a few properties and most need some fixing and I prefer something that does not need it. The property I saw today from only the outside appears to well maintained on the exterior and the interior pictures on the net look great. I may placed a bid on the house before the week is out. To sum it up: It's "The Good, The Bad, The Ugly" and then there's Escrow.
I suppose I'll have to bite the bullet. Thanks.

When you make your Offer, you're in Control. Define it so that it's best for you. Make your Offer contingent upon settling September 1st. Offer the amount of Earnest Money YOU feel comfortable with. The worst thing that can happen is they'll say NO.

I've had people make Offers with only $20.00 as the initial EMD; others pledging the Pink Slip on a 56 Chevy; or the Stud Papers on a Stallion . . . . it's what you feel comfortable with and which will influence the Seller to accept your "well defined" Offer.

PS: Here's an earlier discussion on:

Good Faith Deposits

Start low on the earnest money and see if seller says yes.If not you can always go up.

Never have a builder hold the money in a general funds account.Make sure an attorney or brokerage or title company has a set escrow account to hold EM.

Generally you WILL NOT get interest on earnest money and any interest earned goes to the holder unless otherwise notated in the contract.

You do not in my state of Georgia have to give EM to form a legal written contract although most sellers would never agree otherwise unless they could continue to market and weren't LOCKED IN to the contract.