What is earnest money when buying home in Phoenix Arizona?
When you are buying a home in Phoenix AZ, your real estate agent may ask you how much earnest money you are putting down when writing an offer. So, what is earnest money actually and how much earnest money I need to put down when buying home in Phoenix AZ?
What is Earnest Money?
Earnest money is the “deposit” you pay soon after a home seller has accepted your offer on a home. The earnest money is usually a personal check written by you and made out to the escrow company you had chosen. After the seller has accepted your offer, the earnest money will be given to escrow company. The escrow company will deposit your earnest money check immediately so be sure you have enough money in that bank account to cover the check.
Earnest money shows you’re serious Buyer
Typically when putting an offer to purchase a house, you, as the buyer, will also pay an “earnest money” or good faith deposit. This deposit shows the seller that you’re serious about the offer to purchase the property and to complete the transaction.
How much earnest money I should putting down?
The amount of the earnest money deposit varies based on the type of property being purchased and local market conditions, typically 1% of the offer price. As your real estate professional, I’ll help you determine the appropriate amount to pay as an earnest money deposit.
In Arizona, earnest money typically will be deposited in escrow account with escrow or title company until closing. At closing, the earnest money is applied to the purchase price.
Can I get my earnest money back?
In the event the sale does not close, the purchase agreement generally spells out the conditions under which you would forfeit the earnest money. Generally if the seller meets all the terms of the contract, the seller will keep the earnest money. If the seller does not meet the terms of the contract, you, as the buyer, may receive a total or partial refund of the earnest money.
Swee Ng, Realtor and Phoenix East Valley resident specializing in win-win real estate transaction through great communication and fighting for his clients’ best interest. After all, this is more than real estates, this is about your life and your dreams.
If you are looking to buy or sell your home in Phoenix AZ area, we hope you will consider us. Contact us today for complimentary consultation.
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