During this phase of the deal the check will also go towards a portion of the down payment and act as a symbol that the buyer earnestly wants to buy the home.
The earnest money will typically be held in a trust, escrow, or a joint account with the seller so that the buyer can have additional time to seek financing if needed but the catch is that if the buyers financing falls through they may not be able to get their earnest money back.
The Big Question – How Much Money Is The Earnest Money Deposit?
In Real Estate we all know that buying a home can be a very expensive transaction and you want to know how much of an earnest money deposit you will be expected to pay.
You will be expected to put down about 2% of the purchase price of the home but this could change depending on the conditions of the Real Estate market or location of the home.
It’s not uncommon for buyers to put down an earnest money deposit on a home as high as 3% if they are really intent upon closing the deal and showing the seller that they are serious about purchasing their home.
Before Giving Your Earnest Money Do This
Although you may be eager to put down a larger earnest money deposit make sure that you have full documentation of where the funds came from and can prove that you’ve had those funds for at least 60 days or else a larger down payment might cause problems with your mortgage lender.
You should also NEVER give your earnest money directly to the seller because it could be difficult to get that money back if something goes wrong with the transaction.
To learn more about the earnest money deposit, or to get more tips on buying a home, contact Fred Sed Realty today by calling us at (800) 921-9231 or connect with us through our website.