![]() When you put in an offer on a home, it will include the amount you have available for your earnest funds. #2 Sellers rarely accept offers without a good faith deposit. But making sure that everything is in writing in your purchase agreement is the best way to protect yourself. If the sale does not go through and your purchase contract has protections in place (like inspection and finance contingencies), you should be able to get your earnest deposit back. And putting earnest money on the table can give you a little breathing room to finish getting your financing in order. If the deal goes through as planned, your good faith deposit will fold into your down payment. Think of your good faith deposit as part of your down payment and an advance on the sale. #1 The earnest money for a home purchase is not an additional cost.Īs you prepare to buy a home, you'll want to be saving up a down payment. The earnest funds are controlled by a neutral third party like a title company and include limitations that protect both you and the seller. Sound like a commitment? It is - but there are protections in place. It tells the seller you’re serious about their property and signals the start of the purchase process.Ī good faith deposit usually goes into a trust or escrow account held jointly by the seller and the buyer. When you’ve found a home, you’d like to purchase, and you’re ready to make an offer, putting down an earnest money deposit (also called good faith deposit or earnest funds) lets everyone know you’re prepared to do business.
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