We are often asked what is the point of earnest money and how much earnest money is required.
First the point of earnest money. Earnest money is to show the seller that the buyer is earnestly interested in the property. It is how much "skin" do they have in the game. If the buyer breaches on the contract, the seller is able to collect the earnest money as payment in taking the home off the market during the buying process.
How much earnest money is required? As with most things in a real estate transaction, earnest money is negotiable. A seller would want as much earnest money as possible and the buyer would like as little earnest money as possible. Usually, the agreement is about 1% of the purchase price as earnest money. But that is not always the case.
Earnest money is the money required upfront (typically after the contract is accepted) to show the buyer is serious.
If you have questions about the earnest money process or need help in buying a home in the East Valley, please reach out to me. I love helping buyers with their home buying process.
Author:Sharon Rodgers Phone: 480-420-6657 Dated: February 27th 2015 Views: 329 About Sharon: ...
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