What IS Earnest Money?
Some buyers are confused! Aren't they?
How many times have buyers asked, "My earnest money is the down payment, RIGHT?" WRONG!!
Earnest Money is a good faith deposit but not to be confused with a down payment. When buyers execute a purchase contract, the contract specifies how much money the buyer is initially putting up to secure the contract, to show "good faith", and NOT to be confused with how much money they will be having to come up with as a down payment. Two very different amounts serving TWO very different functions in a transaction. An earnest money deposit says to the seller:
"YES, I am seriously (Earnestly) going to go forth with the process of buying your house so much so that I'm willing to put my money where my mouth is." This amount, although not part of the down payment,WILL go toward the amount the buyer will have to come to the closing table with. It WILL be credited to the buyer's closing costs. DOWN PAYMENT, on the other hand, is at a minimum, set by the lender in order for the buyer to satisfy their credit worthiness. That amount is based on MANY things and is usually set forth at the time the buyer is PRE-Approved for their loan.
IF you need real estate assistance and you are either moving to North Texas OR you already live in this area and want someone to help you BUY OR SELL......GIVE ME A CALL TODAY! Let's get started.
The Market is moving....ARE YOU READY TO MAKE A MOVE??
Kathy Fisher, Realtor
Wise County & Beyond
Colossians 3:23 - "Whatever you do, work at it with all your heart, as working for the Lord, not for men."