What is Earnest Money and is it Required for Purchasing a Home?

What is Earnest Money? How much should earnest money be? When should you pay the earnest money? Do you get the earnest money back?

Here is how it works in the twin cities.

The earnest money deposit is an important part of the home buying process. It tells the seller you agree a committed buyer and it helps fund your down payment. (It is a credit to you at closing.)

Assuming that all goes well and your offer is accepted by the seller, the earnest money will go toward the down payment and closing costs. In many circumstances, you can get most of your deposit back if you discover something wrong with the home during the inspection of the home. (See your inspection terms!)

As soon as your offer is accepted, you will need to deposit your earnest money with the listing broker. Your agent can do this for you if they are holding your check. If you still have the check, you should drop it off at your agent’s office the day your offer is accepted. (ALWAYS KEEP A COPY FOR YOUR RECORDS.) They will only have 3 days to get it deposited with the seller’s agent!

Also, we can now use TrustFunds in many cases!

Questions? Call me!

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