The Real Estate Earnest Money DepositJune 16, 2014
If you have ever purchased real estate in Fort Walton Beach, Destin or the surrounding areas, you are probably familiar with the subject of an earnest money deposit. For those who have not yet crossed this real estate milestone, consider this deposit as an indicator of buyer commitment to a seller.Â
Earnest money is put towards the down payment and overall closing costs. Without it, buyers could make offers on multiple homes, essentially taking them off of the market until they made a decision. While it sounds clear, buyers often ask how much toÂ put forth, what time frame it is paid and whether or not it is returned should the deal fall through.
While the answers to these questions may vary from state to state and home to home, you can generally expect to pay 1-2% of the total purchase price of the home in earnest money afterÂ a contract has beenÂ executed by both parties. The check is thenÂ given to the title company or real estate broker and held in escrow until the final stages. Should the final stage fall through,Â whoever holds the deposit determines whether or not the money is returned. It is important to remember that this deposit is not like a typical security deposit so the subject of refunds should be thoroughly discussed beforehand.Â
For more information about the real estate earnest money deposit, contact one of our experienced agents today.Â