Consider these precautions to protect your earnest money. Always keep in mind the contingencies you and the seller put in place. Remember, contingencies are meant to financially protect both of you. Make sure any changes, big or small, are properly recorded in detail so everyone is held accountable for their responsibilities. Delayed earnest money refunds are most commonly the result of missed deadlines. Buying a home may take a lot of patience, dedication and research, but few milestones in life can feel as rewarding.
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Have more questions about the home buying process? Want to spruce up your apartment without losing your security deposit? Learn about these DIY projects for renters that work for small budgets and spaces. At Home. What Is Earnest Money?
When Is Earnest Money Due? Back to top Earnest Money Factors to Consider There are a lot of market factors to review when making an offer, so getting a feel for how much earnest money you should put down is key. Market trends Depending on the region, homes may only be on the market for a few days before offers are even entertained.
Let your earnest money do the talking If you really want to purchase a given home, it may be wise to aim high. Back to top Is Earnest Money Refundable? Remember your contingencies Always keep in mind the contingencies you and the seller put in place.
Stick to the timeline Delayed earnest money refunds are most commonly the result of missed deadlines. Back to top Gain Protection for What Matters Most Buying a home may take a lot of patience, dedication and research, but few milestones in life can feel as rewarding. Because it really does depend on a number of factors—mostly related to where you are. In other communities, the focus is on the percentage.
Your down payment is completely separate. Think of it this way: earnest money secures your offer and a down payment secures your financing. Earnest money is simply due up front when you make the offer, unlike the down payment and closing costs, which are technically due later when you close on the home.
Make sure your agent builds these contingencies into your contract so you can get back your earnest money if:. There will usually be a hard date for closing, and your real estate agent can really help you here. If it looks like it may take longer to arrange your financing than you originally thought, you may be able to renegotiate the date to keep things moving smoothly and save that earnest money deposit.
If you need help getting a preapproved for a mortgage so you can put down an offer on the home of your dreams, talk to our friends at Churchill Mortgage. While you can often get your earnest money back in cases where no rules of the contract were broken, keep in mind that there may come a time when you just need to walk away from the deal altogether.
Something unexpected—like an accident, a divorce or a dream that causes you to rethink your entire life—could happen. To protect an earnest money deposit, prospective buyers can follow a number of precautionary steps. First, buyers can ensure that contingencies apply to defects, financing, and inspections.
This protects the deposit from being forfeited in the case that a major flaw is discovered, or that financing is not secured. Second, carefully read and follow the terms of the contract. In some cases, the contract will indicate a certain date by which the inspection must be made. To prevent forfeiture, the buyer should abide by these terms accordingly. Finally, ensure the deposit is handled adequately, which means that the buyer should work with a reputable broker, title firm, escrow company, or legal firm.
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