When you are getting ready to buy a home, it is important that you understand the concept of earnest money and how it will impact the purchase of the home. Earnest money is actually an important part of the home buying process, and your Atlanta real estate agent can help you understand the various reasons why this money is used. In this article we will discuss A Few Things You Need to Know About Earnest Money. Here are a few things to help you understand why earnest money is part of making an offer on a home:
Show the Seller that you are Interested
Without earnest money, it would be possible for a buyer to make offers on multiple homes to get them off the market, giving them time to decide which home they like the best. The problem is that this process ties up the home, causes problems for the seller, and hinders the sale to other potential buyers.
So, when an offer is made with earnest money, then it shows the seller that you are truly interested in the property. In fact, most sellers won’t actually accept an offer unless the offer is made with earnest money in hand.
Money towards Your Home Deposit
Don’t worry about losing that money though, because it will be put to good use if your offer is accepted by the seller. When the offer is accepted, the earnest money is used for the closing costs and down payment on the home. In a situation where the offer is declined or you find something wrong with the home, then you will be able to get most of that deposit back.
Earnest money offers protection to both the buyer and the seller. As a buyer, offering earnest money shows the seller that you are interested and ready to make a fair deal for both parties. Starting the relationship with a good show of will helps you to increase the possibility of the seller making concessions during the negotiation process.
When is Earnest Money Forfeited?
When you are working with an experienced real estate agent in Atlanta, your agent will ensure that you have a good earnest money contingency written into the contract. So, if you choose to walk away from the home, you have a little bit of flexibility to get your money back.
For example, if the home doesn’t pass inspection because problems are discovered, then you can get the deposit refunded back to you. But, if the situation is not covered under a contingency listed in the contract, then it is possible that you might forfeit the money that was paid.
The amount of earnest money that needs to be paid depends on the area where you are buying a home, as well as the price of the home and the seller. The best option is to talk with Duffy Realty of Atlanta, because our team has the experience needed to help you identify the right amount for your earnest money deposit. For more information about buying a home, contact our office today: (678) 318-1700. We hope you enjoyed this article on A Few Things You Need to Know About Earnest Money.