Earnest Money - what is usual and customary in Pennsylvania? Janice Roosevelt, Ecobroker, ABR, ePRO - MATT FETICK REAL ESTATE, Keller Williams - PA & DE

One of the surprising elements of writing an offer in Pennsylvania, as well as in other states,for some first-time home buyers is the custom of Earnest  or Good Faith Deposit Money.

It often is applied to the Down-payment of the house. It can be put in an interest bearing account and if so, W-9s need to be filled out for the IRS. It is held in escrow, usually by the Listing (seller's) agent.

In effect, Earnest Money  indicates the buyer's seriousness about the purchase. It needs to be enough so that the seller knows the buyer won't walk away from the deal casually leaving the money on the table. It allows the seller to take the home off the market with some confidence that it will be sold.

Commonly buyers ask if there money is easily returned if the deal falls through. Most likely, but it will depend on the circumstances. If, in the PA agreement, you have selected Option #1 under the home ins pection contingency, and you decide you don't like the reprt back fro the home inspector, you can, in writing, within the given time period terminate the agreement and receive your Earnest money back.

If you don't tell the truth on our Buyers Financial Statement (BFI) and the lender discovers it or your respond after the deadline on the home inspection (or pest or radon, or  septic or water) and decided to end the agreement, yes your Earnest deposit is at risk.

How much should be put down as Earnest money - various from region to region. I'm asking PA realtors to share what is customary in their areas.