How much earnest money is required when making an offer and if the offer is not accepted what happens to it?
Everything is negotiable, but typically it is 1% per $100,000 up to the $300,000 price range. Homes selling higher than $300,000 generally require earnest money of 2% or more per $100,000. 5% is customary on luxury homes. Once and offer is accepted by both parties it becomes a binding agreement and the earnest money is immediatly deposited into the escrow account of broker the earnest money is made out to in the form of a personal check or certified check/money order. The earnest money is then applied toward the buyer’s down payment or closing costs. If both parties never enter into a binding agreement the eanest money deposit is never deposited into the broker’s escrow account and the check is returned to the buyer.
