So you found your dream home and you are going to write an offer. Why did your real estate agent ask you to bring along your checkbook?

When you finally find your dream home and want to make an offer, you will also be required to put down earnest money in the form of a personal check. This money does NOT go directly to the sller. Your money will be deposited in a trust account with the seller's title company. (The exception to this is the case of a builder on new construction.)

This money represents the sincerity of your offer and is fully refundable if the offer is not accepted, if your loan is not fully approved or if some other condition of the contract is not met by the seller. Also, the earnest money will be credited to you at closing as part of your down payment and/or closing costs.

You should anticipate a minimum of $500 - $1000 for homes under $150,000. In homes over this price range, expect to deposit 1% to 5% of the purchase prices. Some seller's ask for a specific amount or in negotiations will ask the buyer to increase their earnest money deposit.

If you have any further questions about earnest money contact Olathe real estate agent, Brad Papa today!