What Is Earnest Money?
Earnest Money
Before any document or agreement can become a legal and binding contract, for both sides, there has to be consideration. Something must be offered as evidence and proof that an agreement is more than just a person's word to buy. Earnest money is that consideration. The more money you put down, the more earnest you are displaying to the seller that you indeed want to buy his/her home.
How Much Shows Earnest?
An excellent question with no black and white answer. All real estate transactions are individual circumstances and situations that require different approaches. This is one of the many reasons you want to be professionally represented by the western michigan Team™, when it comes time to negotiate a contract. In general, earnest money usually falls within 1% to 3% of the offer price.
When Do I Need to Pay This?
You place earnest money at the time of an offer, either by check or money order. Earnest money is attached to the offer, therefore becoming part of the purchase and sale agreement.
The check is usually deposited within 24 hours after the inspection contingency is waived, which is generally about two weeks after the offer is initially prepared and presented to the seller.
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