Published March 17, 2021
WHAT IS EARNEST MONEY?
Ever wonder what EARNEST MONEY is? Think of it like a security deposit - typically 1% of your offer price. This money is offered to the seller (held by escrow) to show how serious you are about buying their home!
It is not required but it will strengthen your offer to the sellers. And in today's market it is critical to do everything you can to make your offer more attractive.
For the majority of transactions, the Buyer will get their Earnest Money back at closing. This money will be applied directly to your closing costs or go towards your down payment.
However, there is a chance that this money could end up going to the sellers. Once you are under contract as a buyer there are several points in the process where you can walk away from the purchase. If you make it past these timeline checkpoints and decide to walk away (depending on the circumstances) the seller may be entitled to keep the earnest money. *While this can happen... it is not something we see very often!
We know how easy it can be to get lost in the process when you are buying - especially you first-time buyers. That is why we do everything we can to help you understand the process and to teach you what these terms mean. Follow along as we explore more Real Estate terms and the Buy/Selling process!
