When you find the house of your dreams, you show the seller you’re serious by writing a check. This is known in the industry as an earnest money deposit.
By law, this sum must be deposited into the title company’s or broker’s escrow account within two days from the final acceptance of the offer.
Essentially, earnest money deposits (otherwise known as a good faith deposit) represents your commitment to buying the home. It shows the seller you’re operating in good faith and allows them to label the home as “Contingent” in the multiple listing system.
As a result of this, the number of showings the seller takes on may decrease while you, the buyer, go through the due diligence period. The larger your earnest money deposit, the more certain the seller will be of your desire to purchase the house.
“
The larger your earnest money deposit, the more certain
the seller will be of your desire to purchase the house.
”
This deposit can range from about $1,000 to 10% of the home’s sales price. In multiple offer situations, you may want to increase this amount to make your offer more attractive.
Keep in mind, though, that this amount will not be refunded to you if you break the terms of the contract and walk away from the deal.
However, if you meet all of the deadlines and contingencies of the contract, such as the inspection, appraisal, and title review, then the earnest money will be applied toward your down payment at closing.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
When you find the house of your dreams, you show the seller you’re serious by writing a check. This is known in the industry as an earnest money deposit.
By law, this sum must be deposited into the title company’s or broker’s escrow account within two days from the final acceptance of the offer.
Essentially, earnest money deposits (otherwise known as a good faith deposit) represents your commitment to buying the home. It shows the seller you’re operating in good faith and allows them to label the home as “Contingent” in the multiple listing system.
As a result of this, the number of showings the seller takes on may decrease while you, the buyer, go through the due diligence period. The larger your earnest money deposit, the more certain the seller will be of your desire to purchase the house.
“
The larger your earnest money deposit, the more certain
the seller will be of your desire to purchase the house.
”
This deposit can range from about $1,000 to 10% of the home’s sales price. In multiple offer situations, you may want to increase this amount to make your offer more attractive.
Keep in mind, though, that this amount will not be refunded to you if you break the terms of the contract and walk away from the deal.
However, if you meet all of the deadlines and contingencies of the contract, such as the inspection, appraisal, and title review, then the earnest money will be applied toward your down payment at closing.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.