• Step 04 - Prepare for Earnest Money Deposit

Step 4 to Buying a Home: Preparing for Earnest Money Deposit

Similar to getting pre-approved for a home loan, thinking ahead for depositing an earnest money check with your first offer is a smart way to make your offer as attractive as possible to a seller. Although earnest money checks are usually dropped off within 2 days of reaching an agreement with a seller on the purchase of their property, it's a great idea to include a photo of your earnest money check with your offer. This shows the seller that you have prepared to purchase their property and that you have sufficient funds in your bank account for the earnest money deposit. You may be asking, what exactly is earnest money? For a thorough explanation, read this helpful article from Realtor.com

A general rule of thumb for the earnest money amount is 1% of the purchase price, however if you are in a competitive market, you can make your offer more attractive to sellers by increasing the earnest money deposit. If the purchase is successful, earnest money is applied to your mortgage down payment and is held in a secure escrow account up until closing. When the time comes, to ensure its safe keeping, we highly recommend dropping off your earnest money check directly to the escrow company handling the closing of your home purchase. The escrow company, also known as the closing agent, will provide you with a deposit receipt, which will be kept in your purchase file for many years after you own your home. 

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