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Ernest Money Deposit
What
is a earnest money deposit?
When ever
you make an offer on a home it is customary to put down an
earnest money deposit to show the sellers that you are serious
about purchasing the home. The amount may very on a number of
factors but is usually between 1-2 percent of the purchase
price.
Your agent
will usually ask for you to make out a check to the escrow
company that the money will be deposited with. Then they will
make a scan or photo copy of the check in order to send it in
with the offer. In most cases you as the buyer will hold onto
the check until the end of the negotiations and the seller has
accepted your offer. Once an offer has been accepted your agent
will open escrow and ask you to deliver the check directly
to the escrow office. From there the funds will be deducted and
held until the close of escrow. The earnest deposit funds will
be used towards closing cost, any monies left over will be
returned to you shortly after the close of escrow.
The
earnest money deposit can also serves as compensation for a
seller. It usually only happens when you as a buyer does not
purchase the home for reasons outside the guidelines of the
contract or for a buyer not doing something required of them in
the contract.
So earnest
money at first shows a seller your seriousness to buy, then is
applied towards closing cost, and at worst used as compensation
for not performing a duties on the contract to get out of
purchasing the home.
If
you have any questions, Please call
1-866-OC-House
© 2010 OC Home Finder Team.com - All rights reserved.
Written
By Shan Roberts
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