2007-09-06 17:49:42 · 12 answers · asked by Jepache 1 in Business & Finance ➔ Renting & Real Estate
I'm a first time home buyer
2007-09-06 18:01:14 · update #1
Earnest money is a deposit the buyer puts down towards the purchase of real estate. It represents that the buyer is indeed interested and serious about purchasing the property in the contract. As far as the amount goes...There is really no definitive answer and expectations can be changed in different locations. The money will go towards the down payment and/or closing costs of the real estate purchase.
2007-09-06 18:02:42 · answer #1 · answered by snowtosunshine 2 · 0⤊ 0⤋
We didnt. We bought about 6 months ago.
Oh- are you a first time homebuyer?
We found that AZ offers help to first timers who are middle income. It helped, I guess lots of states have this.Tell me if you want more
info.
Okay- I dont know what your state is like but here in AZ our market isnt so great, so they accepted the offer without earnest money. But, we did have money in escrow because of another house that we didn't get.
So our program is called home in five. It is for people who make less than 75000 a year (I think) and who have decent credit. The program gives you 5% of the cost of the loan (not the house. This is interesting when you have a down payment because you get less money from the program but you want to put more money down so your payments are less) as a downpayment or to help with closing costs. The program also helps with your interest rate. For us the rate is 5.95% which was about one percent less than what it was just going through a bank. We had only a few options for financing though. We chose Wells Fargo, but there were a few other lenders that would do the program.
The catch: there is a tax that can be collected if you sell your home AND make a profit AND earn too much money the year you sell it. The guy at the bank made this sound really bad, but I called the IRS and did lots of research and it should be fine. They will just tax part of the 5% if we move early.
Anyway, that is probably more info than you ever wanted but these programs are designed for us. Why shouldnt we use them?
2007-09-06 17:58:35 · answer #2 · answered by niffer 3 · 0⤊ 1⤋
Earnest money is critical to make a actual property settlement valid. If there is not any earnest money, then the settlement isn't enforceable. even with the shown fact that, the earnest money volume could properly be despite the fact which you decide on it to be, like $a hundred. The earnest money is taken care of interior the comparable way through fact the downpayment. It basically occurs previously ultimate as a substitute of at ultimate. some human beings think of that in case you do not supply a extensive earnest money deposit, they don't take you heavily. it extremely is on account which you're putting up little or no hazard in signing the settlement and could walk away at any time and all you may lose is the earnest money. that's an argument of the quantity of hazard they're taking while in comparison with the quantity of hazard you're taking. furnish contracts that have not have been given earnest money are actually not enforceable. in case you do not furnish some earnest money, you're risking not something and that they are risking plenty.
2016-10-18 05:00:14 · answer #3 · answered by ? 4 · 0⤊ 0⤋
In South Carolina the answer is, no it is not mandatory. Earnest money indicates to the seller how serious you are. Note that earnest money is your money and you are not giving it to anyone. Have it put in an escrow account to be held by a neutral party.
2007-09-07 02:32:29 · answer #4 · answered by divepassion 2 · 0⤊ 0⤋
Yes.
As a Realtor, if a buyer didn't want to put down earnest money, then they have ZERO incentive to move forward with the closing and I would advise my sellers to REJECT the offer, and any Realtor with a brain would.
It also appears that you are financially unable to close on the transaction, which is another red flag to sellers.
I hope you have a Realtor representing your interests. Remember that any listing agent that you deal with DOES NOT represent you and is under NO obligation to protect your rights and anything you tell them they can tell the sellers.
2007-09-06 20:12:53 · answer #5 · answered by Expert8675309 7 · 2⤊ 1⤋
Yes, you must put out earnest money. That means you are serious in buying the house. It will be return if you don't qualify or the seller does not accept your offer.
2007-09-06 18:02:45 · answer #6 · answered by Goodhead 3 · 0⤊ 0⤋
consideration (earnest money) isnt required to make a contract valid. Normally, putting earnest money is to 'entice' the seller to accept your offer. The more you put the more they will think that you're serious in buying their home.
Minimum is 500 bucks...to average is around 1% of the purchase price
2007-09-06 18:09:23 · answer #7 · answered by Anonymous · 0⤊ 1⤋
Yes earnest money is intended to show the seller you are "Earnest" in your offer.
Earnest=Serious.
Also for a contract to be legal it must have "Consideration"
Consideration=Money
Hope this helps.
Terry
http://www.Welcome2Arizona.com
2007-09-07 10:15:47 · answer #8 · answered by Terry S 5 · 0⤊ 0⤋
yes, if the deal goes though and you have a loan that covers the Clocing Cost you will get it back
2007-09-06 17:58:09 · answer #9 · answered by Pogo Addict 3 · 0⤊ 0⤋
Ditto on what Marry said =)
2007-09-07 01:51:21 · answer #10 · answered by Anonymous · 0⤊ 0⤋