How to Make an Earnest Money Deposit on a Home
Earnest money is basically an advanced money that one person submit as an escrow to show that he or she intentionally wants to buy a property or home etc. This amount shows that seriousness of the buyer to the seller or a property. However, many people do not know about the safe way to deposit an earnest money and sometimes they lose their earnest money due to different reasons. There are many things that you should keep in mind while paying for earnest money. Keep reading to know tips about how to make an earnest money deposit on a home.
Instructions
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1
First of all, you should get information about the value of the home which will help you in determining how much amount you should pay as earnest money. Usually people pay $500 to $5000 depending on the value of home.
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2
Make sure a reliable title company or broker trust plays the role of intermediary party. You should deposit the earnest money as escrow, which is a third party that holds money on behalf of both transaction parties including the buyer and seller.
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3
You should also decide before time whether you want to pay earnest money by cashier’s cheque, personal cheque, cash or money order.
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4
The most important thing is that you should stipulate the conditions about the return of earnest money including any default in the verification and documentation of the property or home. It will help you in getting your earnest money back if anything disapproving happens.
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5
Before paying the amount as an earnest money, you should make sure that the deal has been signed by the seller of the house which will be a proof that he or she wants to sell the house to you on the mutually decided terms and conditions.
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Try your level best to pay less amount of earnest money because it something disapproving happens, you will not lose a huge amount of money.
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Always pay the amount as earnest money to a third or intermediary party in the presence of the seller which will help in making the deal finalised.
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Make sure you have read all terms and conditions about the earnest money before paying the amount as it will help you to ask for certain amendments in the condition if you find something inappropriate.
