Earnest Money: How Is The Earnest Money Handled?
Your contract will require that you post Earnest Money or deposit money from the time period from when the contract is signed until the closing. Typically, the initial Earnest Money is a personal check for $1,000.00 with the offer. A subsequent Earnest Money payment will typically be due ten calendar days after the seller has signed the contract. The total Earnest Money amount is usually equal to 10% of the purchase price, for buyers who are coming in with a 10% down payment or greater. However, if a buyer is coming in with less than 10% down payment, the total Earnest Money requirement is usually reduced to the buyers proposed down payment. Personal checks may be used for both Earnest Money payments in most cases; cashiers checks and money orders are usually not necessary. By custom, the buyers Earnest Money is held in a trust account in the seller’s real estate agent’s office. At the closing, the seller’s real estate agent will bring a check equal to the total amount of your Earnest
