Earnest Money – How Much and When Is it Cashed? - If you’re a first-time home buyer and have a lot of questions, please do not feel embarrassed! If we bought homes OFTEN, we wouldn’t have 1st-time buyers!
Probably the question I am most often asked is “How much earnest money is needed, and when is my check cashed?”
I recommend that Buyers write an earnest money check in the amount equal to 1% of the sales price. So, on a $100,000 house, that would be $1,000 earnest money.
The purpose of earnest money is to show the Seller that you earnestly intend to purchase his property.
You are asking the Seller to take his home off the market while you conduct inspections and make provisions for your down payment, etc. and in return, the Seller would like assurances that you are earnest in your desire to purchase his property.
We may verbally counter your offer back and forth, but once we reach an agreements on all of the elements of your offer, your earnest money check will be deposited in the escrow account of the Listing Realtor.
Your check is NOT held until closing.
Earnest Money – How Much and When Is it Cashed?
If your financing falls through during the time period stipulated in the contract or if you find something during inspections that alarms you, your earnest money may be returned.
Other costs that you may incur up front include the cost of your appraisal and inspections.
For more information about buying or selling a home, please call me!