*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
You've found the home you can visualize yourself in for the next five to ten years, what's next? One of the first things that a borrower will do is put down "earnest money" or a "good faith deposit". This is an amount of money that shows the seller that a buyer is truly serious about purchasing their home.
Earnest money is usually done by wire or check and is sent over before the purchase contract is signed and released. This dollar amount that the borrower sends over isn't an extra charge at all. In fact, the earnest money will be deducted from the down payment amount that a borrower will need to bring to the closing table.
Earnest money can also be used as a bargaining tool when it comes to buying a home. If the home is in high demand, a large earnest money deposit can persuade the seller to choose your offer over other offers that have already been made.
According to Chase Bank, "In most real estate markets, the average good faith deposit is between 1% and 3% of the property's purchase price. It can be as high as 10% for highly competitive homes with multiple interested buyers. Some sellers prefer to set fixed amounts to help filter out buyers that aren’t serious. The best way to determine a reasonable earnest money amount is to talk to an experienced real estate agent. They’ll assess the property and market-specific factors and quote a figure within the standard range. While losing your good faith deposit is unlikely, offer an amount that the seller will appreciate without exposing yourself to financial risk."
Please contact me for more information on earnest money. I'd love to help give you an edge in any way I can.
*disclaimer: Not all individuals will qualify for each loan type and/or scenario. Please contact me to see if you'd qualify for these loan products and/or discuss your options.
Brayden Ramsay NMLS #1997195
Momentum Loans NMLS # 1606597
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