Understanding Earnest Money

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Barbara Samuson has 1 Published Articles

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Understanding Earnest Money

Posted On : Aug-04-2010 | seen (474) times | Article Word Count : 403 |

If you are going to purchase your dream house, then you need to know what earnest money is. Earnest funds are just like the baiting of a hook. It's the flashy lure that captures a seller's initial interest.

While the down payment is a set amount of the total home selling price provided as a guarantee after an offer has been approved, earnest money is simply what gets the home owner interested in your offer. Earnest money is focused on showing how serious you are about your offer. Sometimes folks are $5,000 serious, some others may very well be $500 serious. Obviously, a bigger amount of earnest money is usually more attractive to the home owner, so those offers will likely be the very first to be accepted.

When offering the earnest money, do not give the check to the home owner. This money ought to be placed in the escrow account or given to the broker or the title company for safe keeping. With a third party holding the check, it is easy to ensure that it is returned safety if the deal falls through, though it might not return immediately if the company cashes the check and then writes you a new one. It is better if they just retain the check until the offer is accepted or turned down.

For even more protection, it is easy to include contingencies inside your contract. These contractual add ons are included to offer you an escape plan if something goes completely wrong, permitting you to back out of the deal without losing your earnest money and deposit. If you plan for contingencies, when your home loan doesn't go through or the house inspection turns up mold, you may safely back out of your offer and take your hard earned money with you.

You must also will include a "liquidated damages" clause to your contract. Under that clause, if you ever back out for any kind of reason not listed as legitimate in the contract, you won't be required to pay anything additional. Why do you really need this clause? Well, if you back out the seller can sue you for damages or pressure you into the real estate purchase against your will. This clause protects you from those things.

That is it. The home of your dreams is simply a bit of money and a protective contract away.

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<h1>Understanding Earnest Money</h1> Author: <a href='http://www.articleseen.com/profile_Barbara Samuson.aspx'>Barbara Samuson</a> If you are going to purchase your dream house, then you need to know what earnest money is. Earnest funds are just like the baiting of a hook. It's the flashy lure that captures a seller's initial interest.

While the down payment is a set amount of the total home selling price provided as a guarantee after an offer has been approved, earnest money is simply what gets the home owner interested in your offer. Earnest money is focused on showing how serious you are about your offer. Sometimes folks are $5,000 serious, some others may very well be $500 serious. Obviously, a bigger amount of earnest money is usually more attractive to the home owner, so those offers will likely be the very first to be accepted.

When offering the earnest money, do not give the check to the home owner. This money ought to be placed in the escrow account or given to the broker or the title company for safe keeping. With a third party holding the check, it is easy to ensure that it is returned safety if the deal falls through, though it might not return immediately if the company cashes the check and then writes you a new one. It is better if they just retain the check until the offer is accepted or turned down.

For even more protection, it is easy to include contingencies inside your contract. These contractual add ons are included to offer you an escape plan if something goes completely wrong, permitting you to back out of the deal without losing your earnest money and deposit. If you plan for contingencies, when your home loan doesn't go through or the house inspection turns up mold, you may safely back out of your offer and take your hard earned money with you.

You must also will include a "liquidated damages" clause to your contract. Under that clause, if you ever back out for any kind of reason not listed as legitimate in the contract, you won't be required to pay anything additional. Why do you really need this clause? Well, if you back out the seller can sue you for damages or pressure you into the real estate purchase against your will. This clause protects you from those things.

That is it. The home of your dreams is simply a bit of money and a protective contract away.About the Author: To find out more with regard to earnest money, Mello Roos taxes, <a rel="nofollow" href=http://www.santaclaritahomesforsale.com>Valencia homes for sale</a> demands, or finding a great <a rel="nofollow" href=http://www.santaclaritahomesforsale.com/WhyChooseMe>Santa Clarita real estate agent</a>, Barbara Samuson can offer you many suggestions for additional reading material. Article Source: <a href='http://www.articleseen.com/Article_Understanding-Earnest-Money_28045.aspx'> http://www.articleseen.com/Article_Understanding Earnest Money_28045.aspx</a>

Article Source : http://www.articleseen.com/Article_Understanding Earnest Money_28045.aspx

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To find out more with regard to earnest money, Mello Roos taxes, Valencia homes for sale demands, or finding a great Santa Clarita real estate agent, Barbara Samuson can offer you many suggestions for additional reading material.

Keywords : Santa Clarita realtor, Santa Clarita real estate agent, Santa Clarita Valley realtor, Santa Clarita real estate blog, Mello R,

Category : Finance : Real Estate

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