Earnest money shows you’re serious: Typically when an offer to purchase a house is made, you, as the buyer, will also pay an “earnest money” deposit. This deposit shows the seller that you’re serious about the offer to purchase the property. It is a show of good faith.
Earnest money deposit can typically range from $500 to $10,000 or more...depending upon the value of the property being purchased and the norm in your community. As your real estate professional, I’ll help you determine the appropriate amount to pay as an earnest money deposit. Sometimes the seller can also request a certain amount or a percentage of the sales price, and some may agree to accept less.
Usually the buyer's broker, or sometimes the listing broker will hold this deposit until you have an accepted offer. Then, within 48 hours after acceptance, that check will be deposited by the broker holding it into a special escrow trust account, and escrow will be opened. Although the closing attorney can hold the earnest money deposit, that is rare in Greenville SC real estate transactions.
You should make sure that the amount of your earnest money can be made readily available before you consider signing an offer. Sometimes the amount of your earnest money deposit can help make your offer more attractive, especially in a multiple offer situation.
Once the offer is accepted and acknowledged, your deposit will be included as part of your down payment, and offered as a credit to you on the settlement statement. If your offer is not accepted, you'll get back your deposit.
Keep in mind that if you back out of an offer once it's accepted and all conditions have been met, you may forfeit the full amount of the deposit and may be liable for other costs incurred by the seller. But, there are also clauses that you can include in the contract that will allow you to get your earnest money back if say, the home inspection is not acceptable, home did not appraise for selling price, you were unable to obtain financing, or the seller refuses to make the repairs that the contract requires him to make.
Our team is very familiar with the real estate contract, and can help you avoid making mistakes that can cost you your earnest money deposit. Contact Victor at 864-438-5050 with your questions.