What's an Earnest Money Deposit and how much do I need?

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Real Estate Agent with PRODUCER Realty LLC - Greenville SC Real Estate

I just got this question yet again, so I decided to post this blog on it. For those who are wondering what an earnest money deposit is, here's your answer...

Writing a checkWhen you sign an offer to purchase a home, the seller will require a deposit. This money shows you are serious about wanting to buy the home.

Earnest money deposit can typically range from $500 to $10,000 or more...depending upon the value of the property being purchased and the norm in your community. The seller can also request a certain amount or a percentage of the sales price.

The buyer's broker, or sometimes the listing broker will hold this check until you have an accepted offer. Then, within 48 hours after acceptance, that check will be deposited by the broker holding it into a special account, and escrow will be opened.

You should make sure that the amount of your earnest money can be made readily available before you consider signing an offer. Sometimes the amount of your earnest money deposit can help make your offer more attractive.

Once the offer is accepted and acknowledged, your deposit will be included as part of your down payment, and offered as a credit to you on the settlement statement. If your offer is not accepted, you'll get back your deposit.


Keep in mind, though, that if you back out of an offer once it's accepted and all conditions have been removed, you may forfeit the full amount of the deposit and may be liable for other costs incurred by the seller. But, there are also clauses in the contract that will allow you to get your earnest money back if say, the home inspection is not acceptable, or the seller refuses to make the repairs that the contract requires him to make. Check with your local contract for these clauses.

 

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For more information about Greenville SC Real Estate, or to browse over 12,000 Greenville SC homes for sale, visit Victor Amadi's real estate website at: www.TheProducerTeam.com or call 864-525-0201.

Victor Amadi is a Greenville SC Realtor, and it may be possible for this information not to partain to your particular situation, or your area. Information, and opinions shared on this blog is intended for those interested in South Carolina real estate, especially Greenville SC.

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Rainer
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Carey Pott
January Financial - Foothill Ranch, CA

Nothing tells a seller you're serious quite like cold, hard, cash, does it?

Sep 22, 2008 12:59 PM #1
Rainmaker
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Victor Amadi
PRODUCER Realty LLC - Greenville SC Real Estate - Greenville, SC
Greenville SC Realtor - Greenville SC Homes for Sale

Absolutely right Carey. My first cash deal, the seller asked for a 10% earnest money deposit, which $55,000. Of course I endend up bringing a check for that much to closing which was unusual.

Sep 22, 2008 08:07 PM #2
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Rainmaker
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Victor Amadi

Greenville SC Realtor - Greenville SC Homes for Sale
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