Have you ever heard of “Earnest Money” before? 💰

👉 It’s essentially a good faith deposit that is provided by a buyer to a seller as a demonstration of their seriousness and commitment to purchasing a property.

I tend to think of it as something like an engagement ring. 💍

→ If you’re getting married, and you want your partner to know that you’re serious, you give them a ring.

When you’re serious about purchasing a house, you give the seller an earnest money deposit.

💲 The amount of earnest money can vary and is typically a percentage of the purchase price, often ranging from 1% to 3% of the total. The specific amount is negotiable between the buyer and seller.

💵 Earnest money or your initial deposit is typically held in an escrow account managed by a neutral third party, such as a real estate brokerage or a title company and serves as a form of protection for both the buyer and seller.

👉 In most cases, the earnest money is applied towards the buyer’s down payment or closing costs at the time of closing the transaction. It is credited as part of the purchase price.

💬 If you’re thinking about buying a home and want to know more details, comment “GUIDE” and I’ll send you my 2024 FREE Home Buyers Guide 👇