WHAT IS EARNEST MONEY? Some buyers are confussed!

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Real Estate Agent with Parker Properties 0459820

 Animated Money          BLUE Pointing FInger       What IS Earnest Money?

                                                 Some buyers are confused! Aren't they?


How many times have buyers asked, "My earnest money is the down payment, RIGHT?" WRONG!!  

Earnest Money is a good faith deposit but not to be confused with a down payment. When buyers execute a purchase contract, the contract specifies how much money the buyer is initially putting up to secure the contract, to show "good faith", and NOT to be confused with how much money they will be having to come up with as a down payment. Two very different amounts serving TWO very different functions in a transaction.   An earnest money deposit says to the seller:  

YES YES YES"YES, I am seriously (Earnestly) going to go forth with the process of buying your house so much so that I'm willing to put my money where my mouth is." This amount, although not part of the down payment,WILL go toward the amount the buyer will have to come to the closing table with. It WILL be credited to the buyer's closing costs.   DOWN PAYMENT, on the other hand, is at a minimum, set by the lender in order for the buyer to satisfy their credit worthiness. That amount is based on MANY things and is usually set forth at the time the buyer is PRE-Approved for their loan.  

IF you need real estate assistance and you are either moving to North Texas OR you already live in this area and want someone to help you BUY OR SELL......GIVE ME A CALL TODAY! Let's get started.

 Market is MovingThe Market is moving....ARE YOU READY TO MAKE A MOVE??

Kathy Fisher, Realtor
Parker Properties
Wise County & Beyond
940-393-5336
katlyn57@juno.com
www.parkerpropertiestexas.com

Colossians 3:23 - "Whatever you do, work at it with all your heart, as working for the Lord, not for men."

 

 

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Topic:
Home Buying
Groups:
Silent Majority
Texas Real Estate and Realtors
The Lounge at Active Rain
A ActiveRain Exceptional First Time Homebuyers across America Group
Local Expert
Tags:
earnest money
home buying tips
money needed by a buyer
north texas
north texas real estate
wise county

Comments 12 New Comment

Anonymous
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Rainmaker
823,964
Nicholas Goglucci
The Listing Whisperer
South Florida Real Estate & Development, Inc.

I suggested this be a featured post - hopefully the ones who make the decisions do the right thing here!

September 20, 2010 10:44 PM
Rainmaker
639,790
Marchel Peterson
Spring TX Real Estate E-Pro
Results Realty

Kathy, You wrote an informative post about something we can take for granted but it is often confusing to our clients.  I have also suggested for a feature.

September 20, 2010 11:30 PM
Rainmaker
563,876
Mike Saunders
Lanier Partners

Kathy - excellent explanation for the first time buyer, and reminder for the repeat buyer, as well as the agent.

September 21, 2010 07:39 AM
Rainer
292,771
Melissa Anderson
Amcap Mortgage, Ltd.

Kathy- Clearly your post speaks to your experience in the matter.  I think it is sad when buyers have no idea what the earnest money was for or where it goes after they write the check.

I often have buyers ask me (the lender) what happens to their earnest money deposit.

Good post.

September 21, 2010 05:35 PM
Rainmaker
54,205
Kathy Fisher
Realtor Wise County Texas
Parker Properties

SORRY ALL for not responding before now. I've been out away from the computer all day.  

NICK - dear friend, that is SO SWEET OF YOU! This would be a first if it did get featured and I would be truly honored for you suggesting it!  

Marchel & Mike - thanks for stopping by and leaving your very encouraging words. I just thought maybe I was the only one getting this type questions from buyers recently.  

Melissa - your comments just confirm the importance of "schooling" the 1st time buyers that come our way. It is just NOT common knowledge of what the process is or what the steps are.  

Again, THANKS all for stopping by!

September 21, 2010 11:42 PM
Anonymous
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Rainmaker
54,205

Kathy Fisher

Realtor Wise County Texas
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