Contact Corey Robinson in Seattle, Washington if you have questions about earnest money or other real estate related matters.
Earnest Money is the amount of money that the Buyer includes in the offer to show the Seller how serious (or earnest) they are about buying the property. The Earnest Money also acts as a type of security deposit. According to the NWMLS contract, the Buyer's Agent has 24 hours from the date that everyone has signed the contract (Mutual Acceptance), to collects the Earnest Money. The Selling Broker or Escrow Company then deposits the Earnest Money unless arrangements have been made to hold deposit until after the inspection.
The Earnest Money can be any dollar amount, often a percentage of the purchase price ranging from 1-4%. It is important to know that Earnest Money is not an amount that you are willing to pay above and beyond the purchase price. Instead, it is an amount that will be credited towards the Buyer's closing costs, when the transaction closes. However, in the event that the Buyer defaults on the contract for a reason other than a legal reason that's included in the contract, the Buyer would lose the Earnest money and the Seller would keep it as compensation for damages incurred by the broken contract.
To find out more about earnest money and other real estate related matters contact Corey now!
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