If you’re in the middle your home search, you have probably already considered the important financial commitment you’re about to make. In addition to a downpayment, there are other costs associated with the homebuying process, such as applying for and securing a loan, hiring an inspector and getting title insurance. One more important check you’ll have to write covers earnest money.
What is earnest money?
Essentially a deposit, earnest money refers to “good faith” funds submitted with an offer to purchase real estate.
When you’ve decided you want to purchase a home and are ready to come up with the offer, one thing you’ll have to decide is how much earnest money to offer the seller. Choosing an appropriate amount demonstrates that you’re a serious buyer who is interested in the property and ready and willing to purchase the home.