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Ways You Can Lose Your Earnest Money Deposit
How You Can Forfeit Your Earnest Money Buying a house is an expensive undertaking. There are so many things to pay for, and if you are not careful, you can easily lose money. In most real estate transactions, the earnest money is one of the things you are required to pay.
Many home buyers want to know how earnest money works. Maximum Real Estate Exposure has one of the most comprehensive articles on everything you need to know about earnest money, including how it differs from a down payment.
Basically, the earnest funds is an amount of money a home buyer pays to the seller as a sign of good faith. It ensures a buyer will proceed with the transaction according to the contract. This amount is held in escrow until the buyer signs on the dotted line, in which case the money goes towards paying for the house. This deposit shows the seller you are serious about the offer you make.
Usually, it is about 1-5% of the selling price of the house. In a competitive market, your earnest money deposit can go up substantially. In fact, it might be one of the things your real estate agent recommends ... more
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