1/31/2024 0 Comments Earnest money![]() If the home buyer backs out of the deal under certain circumstances, he or she forfeits the earnest money deposit. The conditions surrounding the deposit, such as the allowable reasons for refunding the deposit to the buyer, are outlined in an agreement. But in the average housing market, the deposit is paid upon execution of the purchase agreement, and the funds are held in an escrow account. In competitive markets, the home buyer might include the deposit as part of the offer. Depending on the present real estate market, the deposit usually equals 1-2% of the purchase price, but sometimes ranges up to 10% of the price. They also serve as compensation for the seller to remove the property from the market. Also known as a good faith deposit, the funds can signal sincerity in the offer to purchase the home. The earnest money deposit represents the buyer’s intention to buy a house. ![]() So, in what scenarios do home buyers forfeit the deposit, and in which situations will they get a refund? Here’s what you need to know. But despite everyone’s best efforts, home sales sometimes encounter an issue. After all, home buyers typically pay an earnest money deposit upfront, which can be applied to the down payment or closing costs. In fact, did you know that around 5% of pending home sales end up falling through? And that can translate to the buyer losing money, depending on the reason for the sale being canceled. As you might have noticed while working in real estate, there’s always a chance that something will go wrong during the home buying process, changing the terms of the purchase contract or even canceling the real estate transaction altogether.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |