If you are currently in the market for East Village San Diego real estate, you may have heard about something called an earnest money deposit. Especially if you are a first-time buyer, it’s possible you have no idea what this type of deposit entails. The friendly agents at 92101 Urban Living are here to clarify the process for you.
An earnest money deposit marks the beginning of the financial phase of the property buying process. A potential buyer gives the real estate agent a check to be deposited into an escrow account when the seller accepts the offer. This check includes anywhere from 1 to 3 percent of the accepted selling price of the loft, condo, or penthouse.
The purpose of the earnest money is to convince the seller that the buyer is sincerely interested in purchasing the home. Without putting this money down, a buyer could potentially have offers accepted on various homes with no restrictions and then back out of sales, to the dismay of many sellers.
There are a few benefits to offering more earnest money to a seller. More money offered signifies a buyer is completely ready to purchase the property and close the deal quickly. If the deal goes through smoothly, the earnest money goes toward the down payment and closing costs on the home. Earnest money is not an additional payment of any kind. If the earnest money totals more than the closing costs and the down payment combined, the buyer receives the difference at the closing.
There are also some drawbacks to offering substantial earnest money. If a property sale does not work out due to a bad inspection, inadequate financing, or another roadblock, the buyer may not get the entire earnest money amount back. There are usually small cancellation fees that come out of the deposit. Additionally, most purchase contracts state that if the sale does not go through, the earnest money will stay with the seller due to loss of time for taking their property off the market.
There are many other tricks and tips you can use to ensure you’ll soon be a proud owner of one of the many attractive condos and lofts in East Village San Diego. Get in touch with 92101 Urban Living today at 619-649-0368 and we can help you find the downtown San Diego property of your dreams. ')}