Bloomfield Hills Real Estate: How Much Earnest Money do I Need?
Posted in Bloomfield Hills Real Estate by Michigan Real Estate Expert on September 6th, 2012 Sellers need to know if you are serious about buying their home. Earnest money is a good faith deposit that demonstrates to the sellers that you are serious about purchasing their home. This deposit can, and probably will be, forfeited if you walk away from purchasing the Bloomfield Hills real estate.
What is a standard earnest money deposit? There is no set amount, but 1% to 3% of the agreed upon sale price of the Bloomfield Hills real estate is typical. The amount varies depending on your local customs.
Here are a few precautions you should take to protect your earnest money:
- Never give an earnest money deposit to the seller – not even if you’re buying a home that is for sale by owner (FSBO).
- Make the deposit payable to a reputable legal firm, escrow company, title company, or well-known real estate brokerage.
- Verify that your deposit will be put into a separately maintained trust account, and only dispersed according to the terms of the real estate contract.
- Never authorize a release of your earnest money until the purchase transaction closes.
Is your earnest money refundable if you cancel the Bloomfield Hills real estate contract? Laws vary from state to state, so be sure to read and understand your contract before signing it. Some states have a grace period in which to cancel the contract. If cancelled, both parties must sign mutual release statements before your earnest money is refunded.
When you are ready to find your next Bloomfield Hills home, I can help. Give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com.
Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
www.NorthWoodwardHomes.com
