What Is Earnest Money And Why Is It Required?

Did you know there's a secret handshake in real estate, but instead of shaking hands, you hand over cash? Watch the video or real below so you can:

• Understand what earnest money is and how it signals your commitment to a home purchase.
• Learn why earnest money is crucial for protecting sellers when they take their home off the market.
• Find out what happens to earnest money if the deal closes successfully.

What Is Earnest Money?

Earnest money is an upfront deposit buyers agree to put down when making an offer on a home. It’s telling the seller, “I’m in and I’m serious about this purchase!” The amount varies, usually between 1% and 3% of the home’s price, depending on your local market.

Why Is It Required?

It’s there to protect the seller. They’re taking their home off the market for you, and this deposit reassures them that you’re serious about following through.

What Happens To It?

The good news? If the deal goes through, that money is applied to your closing costs or down payment. Think of it as an investment in your dream home, not money lost.?

If the deal doesn’t close, what happens to the earnest money depends entirely on the contract and the specific situation. There are so many possibilities that it’s impossible to cover them all in this short video.

At the end of the day, earnest money is like putting your money where your mouth is. Got more?buyer-related questions??Contact me?and let me lend a hand!