The earnest money deposit is a very important part when buying a home.
When a buyer gives an earnest money to the homeowner, it tells the property owner that a buyer is very committed.
Seller does not want to accept an offer without earnest money deposit.
If seller accepts an offer for the home, then earnest money will go toward the down payment and closing costs.
When a homeowner accepts the offer from the buyer, bioth sides sign a contract on final price and down-payment. The contract does not force the buyer to buy the home because home inspection can reveal problems with the house.
The contract does guarantee that the homeowner takes the house off the market while the house is inspected and appraised. The buyer is required to give an earnest money payment as a proof that offer is serious.
Earnest money is paid 1-3 days after the homeowner accepts the buyer’s offer.
Earnest money is usually paid by a check or a wire transfer into a trust or escrow account which is held by a legal company, real estate brokerage, or title company.