Step 10: Deliver Your 1st Earnest Money

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To secure your accepted offer, one of the key steps in the process is tranferring your first earnest money. An earnest money deposit, also known as escrow, is a monetary deposit made by a potential homebuyer to demonstrate their seriousness and commitment to purchasing a property. This deposit is typically made after the seller accepts the buyer's offer and serves as a show of good faith. 

Your earnest money deposit plays a vital role in the home buying process for several reasons. First and foremost, it demonstrates to the seller that you are a serious and committed buyer, making your offer more appealing and competitive in a competitive real estate market. Additionally, it provides the seller with some financial protection in case the buyer backs out of the deal without a valid reason. The earnest money deposit compensates the seller for taking the property off the market while the transaction is pending, which is especially important in a fast-moving real estate market. Furthermore, having an earnest money deposit in place can make negotiations with the seller smoother, as it demonstrates your willingness to proceed with the transaction in good faith.

The amount of your earnest money check is not fixed and can vary depending on factors such as the local real estate market, the price of the property, and the seller's preferences. Typically, earnest money deposits usually equals 5% total in two payments:

1st deposit with Offer for $1,000 - deposited after sellers sign the offer

2nd deposit (5% of Purchase Price -$1,000 (1st deposit)

It's essential to consult with our team and we will follow local guidelines to determine an appropriate amount.

Understanding the process of making your earnest money check is crucial to a successful home purchase. You should start by consulting with us, your agents, who will guide you on the appropriate amount for your earnest money deposit and assist you in preparing the necessary documents. Once you determine the amount, you'll need to write a check payable to seller's agent's company or seller's attorney, who will hold the funds until the transaction is completed. Submit your earnest money deposit to the designated party within the specified timeframe outlined in your purchase agreement to avoid delays or complications in your home buying process. Additionally, carefully review your purchase agreement to ensure that it includes contingencies that protect your earnest money deposit, such as inspection and financing contingencies.

Recently, most real estate offices will collect earnest money (escrow) electronically via a secure portal.  There is a nominal fee per each transaction to send electronically.  This is helpful when buyers are not nearby.