3 Things To Know About Earnest Money When Buying A House
Buying a house is a process that involves a lot of different steps, and one of the main ones is choosing the house you want to purchase. Once you are certain that you have decided on the right house, your real estate agent will work with you to create a purchase offer that will be given to the seller of the house. With the offer, you will have to send a check for earnest money, and this is an important step in the process.
It is used to show that you are serious about your offer
Earnest money is like a down payment, except that it is not a huge down payment like the one you will need to make before you close on the house. Instead, it is a relatively small amount of money given to the seller of the house to show that you are serious. This is required simply to prevent people from throwing offers on the table and not having any consequences of doing so. The amount you will need to pay as earnest money varies, but it is sometimes as low as $500. In other cases, it may be thousands of dollars. Your agent will help you determine what a good amount is when you make your offer.
It will be credited to you at closing
If the seller accepts your offer and the deal closes, the amount you paid as earnest money will be credited to you at your closing. This means that you will need to bring less to closing than you had expected, and you should make sure the closing documents reflect this payment that you had made.
You can only get it back if you have a legal reason to back out of the deal
If, for some reason, you back out of the deal, you will only be able to get the earnest money returned to you if you have a legal and valid reason for backing out. If you back out simply because you changed your mind, you cannot expect the seller to return the money. On the other hand, if you back out because you cannot get a loan from your lender, you should be able to get a refund on the earnest money you had paid.
Before you make an offer on a house and offer a check for earnest money, you must make sure that you are absolutely certain you want to buy this house. If you would like to find out more information about the home-buying process, you can talk to an local real estate agent.