Earnest money deposits are a crucial component of any real estate deal. This sum shows sellers how serious you are about purchasing their home, so today let’s discuss a few of the most common, and most crucial, questions people have on this subject:
What is an appropriate amount to offer when submitting an earnest money deposit?
On average, a good earnest money deposit should be between 1% and 3% of the total purchase price. This will, however, depend on your area.
When is the earnest money deposit due?
As a general rule, earnest money must be submitted within three days from the time you sign the purchase agreement.
Where does the earnest money deposit go after it’s been submitted?
Earnest money deposits will be held by the bank in a third-party escrow account until closing.
How do you get the earnest money deposit back?
When you sign a purchase agreement, certain contingencies will protect you against losing out on this deposit. So long as you don’t violate the terms of the contract, the earnest money deposit can be refunded to you if you withdraw from the deal within the due diligence period. If the deal proceeds without issue, the deposit will be applied toward your down payment or closing costs.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.