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Earnest money

When buying a home, you’ll have to come up with an earnest money deposit when you actually put in an offer on a home.

Earnest money is a sum, usually between 1 percent of the home’s purchase price,that you “put down” to show the home sellers that you are indeed a serious buyer.

To make an earnest money deposit, you’ll write a personal check or obtain a cashier’s check from your bank. Typically, you will drop a check off to the title company.

The title company handling your purchase will hold your earnest money deposit in escrow. Escrow just means that it’s safe; it just sits in an account until it’s time to use it in the purchase of your home. Work with your Realtor to ensure the amount/location of the earnest money payment.

When you make an earnest money deposit, it’s used toward your closing costs or your down payment. Most of the time, it sits in that escrow account until you are almost ready to close. Then, the Title company applies it toward the costs you’re required to pay. That's it!



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