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If you are considering buying a home anytime soon you might be asking yourself, “What is earnest money and why do we need it?”. We are here to help answer that question for you.
Earnest money shows the seller that you are a serious buyer with the intent to purchase their property. This money will be held in escrow and is usually 1% to 5% of the purchase price. When the deal closes successfully the earnest money is applied to your down payment or closing costs.
What happens if the deal fails?
If the deal fails to close due to one of the contingencies of the contract, you will typically get your earnest money back. But there are certain situations where you could loose it. This is why it is important to work with an agent that understands your purchase criteria and builds contingencies into your offer to keep your earnest money safe. Do you want to learn more? Call us to discuss!
