PW Real Estate Earnest Money

Real Estate Blog

If you are planning on making an offer on a house, you should plan on writing a check to use as your earnest money. Earnest money is a deposit for a house and is required when writing an offer. You can get this money back in certain situations when the deal falls through, but you could also lose this money if you back out of the deal for an invalid reason. Here are three things to understand about earnest money.

It's designed to show that you are serious

The main purpose of putting earnest money down when writing an offer is to show that you mean business. Without putting any money down, you could randomly go and make offers on as many homes as you would like, and there would be no ramifications for doing this. With earnest money down, you are showing that you seriously want to buy this house.

The amount you will need as your earnest money can be as little as $500, or it can be a lot higher than this. If you are in a bidding war for a house, you might be better off putting a lot of money down as your earnest money. By doing this, the seller might choose your offer because it might show that you are interested the most in this house.

You can only get it back if you have a valid reason

If you write up an offer and put earnest money down, you cannot simply tell the seller of the house that you changed your mind about buying the house and now want your money back. This is not how this works. You will need to have a valid reason for backing out of the deal, and here are some valid reasons you could use if they apply:

  • You cannot get a loan – Without a loan, you will not be able to buy the house.
  • The appraisal came back too low – If the house does not appraise for at least as much as you are paying for it, you will have the right to back out of the deal without losing your earnest money.
  • The house has a major flaw the homeowner did not tell you about – If during the process of buying this house, you discover that the house has a flaw that is really serious, you can back out of buying the house without losing your money.

There are other reasons too, but these are the most common. If you have questions about the amount of earnest money you will need to buy a house, or if you need help finding new homes near you, talk to a real estate agent. 

Share  

25 April 2018

Choosing Beautiful Real Estate

I have always been someone who is passionate about making the world around me more beautiful, which is probably why I was drawn to real estate initially. I really wanted to create a place where me and my family could spend a lot of time together in a peaceful, relaxing place, so I started looking for places in my area that were fit for the job. Within a few months, I was able to find an incredible property that was within my price range, so I purchased it as soon as possible. This blog is all about choosing beautiful real estate.