What Does An Earnest Deposit Signal To A Seller?

What Does An Earnest Deposit Signal To A Seller?

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Hey everyone. Just want to take a few minutes to discuss with you about what the earnest money deposit means to you when you are selling your home. (what an earnest deposit signal to a seller) So if you’re presented with an offer for someone to purchase your home, then they need to provide an earnest money deposit. And what that is, is showing their commitment to purchasing the home depending on their financing terms, then that can really impact how much the earnest money deposit will be. But in reality, it should be anywhere between one and 3%.

The stronger the earnest money deposit is, the stronger buyer that you possibly will have because that means that they are probably more qualified since they’re showing they’re considered depositing the money that they will have the funds to close, they need to close with. Now it can be collected in different instances so they can present the earnest money deposit with the offer, which is probably going to be the strongest way to do it. Or it can already be held in escrow because maybe they just really want the property and they want to show their strong level commitment. Or they backed out of a property previously and so now they already have the funds in escrow. It could be collected within offer acceptance, which is strong as well.

But then sometimes a lot of times you’ll see that they won’t deposit until after the inspection, which isn’t something to be that concerned about. Just means that when they do it ahead of time, they’re a stronger buyer. But with the inspection period, that’s usually going to make or break the deals. A lot of times they will do it that way because they don’t want to submit that type money without knowing if they really feel they’re going to move forward with the house. Now what does it mean to you in regards if a buyer backs out of the deal?

So if they present the money up front or they’ve collect you collected it after inspection, whatever case may be. And the contingencies they have to purchase a home are just the inspection and the appraisal. And let’s say they move past inspection, the home appraises and then just for no reason at all, they decide, “oh, I don’t want to buy the house,” then you technically have a right to go after the earnest money. Now you can always go after the earnest money deposit no matter what. But it’s not always an advantageous idea to do so depending on situation.

I mean, if they need an extension to close on the home, you don’t want to necessarily throw that wrench in there. I’m going to retain the earnest money deposit because you want to close in a day. Now if it’s another two weeks or something, that’s a different story. But the earnest money deposit can be used as a seller for leverage to make sure that you are protected or you get some kind of money if for some reason the buyer doesn’t purchase the home.

So that’s all I have for you today. If you have any questions, leave a comment below, or you can email me at [email protected] all right, thanks. Have a good one. Bye.

This has been “What Does An Earnest Deposit Signal To A Seller?” by Patrice Henderson Be sure to subscribe to her YouTube channel for all your real estate tips, home tours and advice. Get your FREE listing consultation or home evaluation to learn the value of your home and what you can do to increase your home’s value.