Congratulations! They accepted your offer, now we need to give an escrow deposit. I find there is a lot of confusion about the deposit, so let me devote this post to this very important aspect of the home purchase process. When writing an offer for Real Estate, you include a deposit, this serves as a sign of good faith on the part of the buyer and is derived from contract law, which states that contracts should include a "consideration" to bind the contract. This money is generally held by a Title Company, Lawyer, Real Estate Broker or other financial institution. This money is applied toward your closing costs at closing. The amount of the deposit, can be anything from $100 to ten percent of the purchase price. You offer an amount initially and the Seller either accepts this amount or asks for more. If you walk away from the deal, the seller gets the deposit as liquidated damages, this does not mean, if your mortgage does not get approved, or other acceptable reasons, such as, to many problems stemming from inspections. The main purpose of the deposit is, to make all parties involved, feel secure that the deal will close as expected.
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