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All About Your Earnest Money Deposit

Posted on June 12, 2014

,oneyIf you have ever bought real estate in Destin, South Walton or the surrounding areas then you are likely familiar with the earnest money deposit. For those who have not, think of this as money towards your down payment and closing costs. In general, it helps to convey a sense of buyer commitment that can further ease a seller’s mind.

In theory, this all sounds great. However, there are a few commons questions that arise in a first-time buyer’s mind. How much money should be put down and when is it paid? Ultimately, the amount you will pay depends on a variety of factors which include state policies, current market conditions and seller requirements. On average, you can expect to pay 1-2% of the total purchase price. You will hold onto the earnest money until a contract is executed by both parties. At that time, it is turned into a Realtor who will hold the funds in an escrow account until the final stages.

There are cases where deals fall through and deposits are left in escrow. In this situation, whoever holds the deposit determines whether or not the earnest money is returned. This is based off of the purchase agreement so it is important to make sure that the subject of refunds is thoroughly discussed beforehand.

For more Northwest Florida real estate tips, contact a RE/MAX Southern professional today.

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