Typically when an offer to purchase a house is made, you, as the buyer, will also pay an "earnest money" deposit. This deposit shows the seller that you're serious about the offer to purchase the property.
The amount of earnest money deposit varies based on the type of property being purchased and local market conditions. As your real estate professional, I'll help you determine the appropriate amount to pay as an earnest money deposit. The larger the deposit, the more “serious” you will appear to the seller and you can use this to your advantage when negotiating the purchase price.
Usually the buyer’s real estate agent will deposit your earnest money in a trust account (escrow) until the day of closing. At closing, the earnest money is applied toward the purchase price and closing costs.
If the sale doesn't close, the purchase contract generally spells out the conditions under which you would forfeit the earnest money or get it back. For example, if you are applying for a loan and cannot qualify, you usually will be entitled to get back your earnest money deposit. If you qualify for the loan and all is well but you “change your mind” about purchasing the property, your earnest money will likely go to the seller.
Contact me for a consultation about buying a home.
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