How much earnest money to offer

With Credible, you can compare all of our partner lenders and see prequalified rates in as little as three minutes. Find Rates Now. This means that neither you nor the seller can touch the money until certain conditions are met, which are spelled out in the purchase agreement.

If the home sale proceeds as expected, your earnest money deposit will help cover your down payment and closing costs.

A sale could fall through for many reasons. In some cases, you can lose your earnest money deposit:. Each of these will give you the opportunity to get your earnest money back:. Credible can be a big help when trying to find a great interest rate. The seller may keep the earnest money when the buyer breaks a key part of the agreement. The seller will require a legitimate reason to break the contract. The buyer can reclaim their earnest money when the seller fails to deliver on a promise in the contract.

Suppose the seller agreed to replace windows before closing and, upon final inspection, the buyer finds the windows were not replaced as promised. The seller would then have to forfeit the earnest money back to the buyer and the contract to purchase might be voided pending any other arrangements made between the seller and buyer. If the buyer agrees, they can move forward and close.

Yes, you do get your earnest money back at closing. After being released from escrow, earnest money becomes cash you use to purchase the property. There, your earnest money is typically applied to the down payment. Consider these precautions to protect your earnest money. Always keep in mind the contingencies you and the seller put in place. Remember, contingencies are meant to financially protect both of you.

Make sure any changes, big or small, are properly recorded in detail so everyone is held accountable for their responsibilities. Delayed earnest money refunds are most commonly the result of missed deadlines. Buying a home may take a lot of patience, dedication and research, but few milestones in life can feel as rewarding. The effort you put into building your future should be matched with the effort American Family Insurance puts into protecting it.

Take the next step in protecting your dream by exploring our homeowners insurance options or reach out to an American Family Insurance agent to get your quote today.

Have more questions about the home buying process? Want to spruce up your apartment without losing your security deposit? Learn about these DIY projects for renters that work for small budgets and spaces. At Home. Was this article helpful? Share your feedback. Send feedback to the editorial team.

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