Okay, so you are in the middle of a real estate transaction when the Buyer breaches the contract and now you, Mr. Seller want to collect damages. The deposit that was on the contract is low, perhaps only $1000 but your damages are higher than the deposit. The law says that the Seller can collect as much as three percent of the purchase price right, true, except if you initialed the “Liquidated Damages” provision. In a standard residential purchase contract where the Buyer will occupy the home, the seller will only be entitled to the deposit amount. The Seller needs to understand what it means to initial the “Liquidated Damages” provision. When this clause is initialed by both Seller and Buyer; this provision will limit the amount that the Seller can recover to the deposit amount, should the Buyer breach the contract. So, should you accept an offer with a low deposit? It is just fine to do so, but keep in mind that it will limit your recovery amount.