Tuesday, November 21, 2017
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Pawleys Island Real Estate Homes
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An Earnest Money Deposit

 How Serious Are You?

 

So you really want that house, don’t you? Well, at Pawleys Island Real Estate, I see a lot of clients who don’t want to let that home slip away……in fact, some are ready to put down a deposit with the seller so they secure the home of their dreams.

An earnest money deposit, also known as a good faith deposit, is a specific dollar amount that a potential buyer pays to the seller in an effort to display their serious interest in a property.  It’s important to note that an earnest money deposit is not the same as a down payment. If you are looking at homes for sale in Pawleys Island, and find one that you don’t want to slip away, check out the perks of an earnest money deposit.

 

Just Hangin' Out

If you are ready to settle on a new lifestyle, sometimes we just don’t want the home of our dreams to slip away.

 

 

 

 

 

 

 

 

 

 

The Purpose Of An Earnest Money Deposit 

 

An earnest money deposit is used to secure a purchase contract, which means the buyer doesn’t have to worry about the property being sold out from underneath them.  Without an agreement, the seller would be free to sell the home at anytime.  An earnest money deposit, however, secures the availability of the home as the potential buyer obtains an inspection, appraisal and financing for the purchase.

 

How Much Good Faith Is Enough 

 

Realtors will get you a higher price and will walk you through negotiations

An earnest money deposit is negotiable, but will most likely depend on the home purchase price, location, and its desirability!

 

 

 

 

 

 

 

 

 

 

So, just how much of an earnest money deposit is required?  Truthfully, it depends on a number of factors, including the home’s purchase price, your location and the standard as set by other sellers.  In most cases, the earnest money deposit is negotiable and the seller will be happy in knowing that the potential buyer is serious enough to offer their money in good faith.

 

How An Earnest Money Deposit Is Used 

 

If the transaction is successful and the buyer follows through with the purchase, an earnest money deposit is most commonly refunded to the buyer or applied to closing costs.  If the buyer defaults or is unable to obtain financing, the seller often has the discretion to retain the earnest money deposit as damages or as otherwise described in the purchase agreement.

 

mortgage 2

Have faith in the person that is accepting your money…the money is generally ‘refunded’ and used in closing costs.

 

 

 

 

 

 

 

 

 

Using Your Dollars And Sense 

 

When it comes to an earnest money deposit, it’s essential that buyers know who should receive the money and how to handle the payment.  In most cases, the deposit should be made payable and presented to a licensed real estate broker, an attorney or escrow company.  Your Real Estate Agent in Pawleys Island can assist in getting your earnest money deposit into the right hands.  It’s important to obtain a receipt, which should clearly outline the purpose of the deposit.  The funds will be handled in accordance with the purchase agreement and/or as agreed upon by both the buyer and seller.

 

Before handing over a good faith deposit, make sure that you have faith in the person accepting your money.  Potential buyers should not give an earnest money deposit directly to the seller, nor should they give it to anyone who claims to be with a brokerage firm unless their credentials are verified.

 

Melissa Keller, Pawleys Island Realtor

 

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Pawleys Island Real Estate Homes