Earnest Money
What is earnest money?
This is a term used in real estate to express your formal interest in purchasing a property. This is paid by the buyer to the seller. It is usually held by an attorney or broker in an escrow bank account until closing.
There are a few things to consider when dealing with earnest money.
Please pay earnest money by the date specified in the contract. If you do not do this, you are in breach of contract and could potentially lose the home and be held liable to pay it anyway.
Due diligence allows you the opportunity to retrieve your earnest money for anything whatsoever should you decide to terminate.
Your earnest money is applied toward your closing costs at closing.
Can be anywhere from 1%-5% of the purchase price.
After due diligence period, if you terminate for any reason other than financing contingency, you will LOSE your earnest money. So make sure you do your due diligence during this allotted time.
Earnest Money is a term that is used in every real estate transaction. It’s essentially to show you are serious about buying a seller’s property. So serious you’re willing to put money up to prove it. If you follow the directions i’ve described your money will be protected.