When you buy a home, whether it’s a house for sale in Turtle Ridge, a townhome for sale in University Park, or a home for sale in Woodbridge or Westpark, you’re going to need to make an earnest money deposit.
But what is earnest money, and why do you need it? (More importantly, where does it go after you give it to your agent?)
What is Earnest Money?
Earnest money is a deposit – sometimes called a good faith deposit, actually – that you give the seller to show you’re serious about buying his or her home.
You don’t give it directly to the seller, though. That would be too risky. Instead, you give it to your Irvine Realtor®, who gives it to the escrow holder. The money sits there until closing day, as long as your transaction goes through without a hitch.
How Much of an Earnest Money Deposit Do You Need to Buy a Home in Irvine?
Typically, you’ll spend about 3 percent of the home’s purchase price on your earnest money deposit. If you were buying a $100,000 home, you’d need to put about $3,000 down to show the seller that it’s okay to take his or her house off the market because you’re serious about buying it. (It’s kind-of putting your money where your mouth is, essentially.)
When Do You Make Your Earnest Money Deposit?
You’ll make your earnest money deposit after the seller accepts your offer and you sign a purchase agreement for the home.
What Happens to Your Earnest Money?
Your earnest money deposit will either go toward your closing costs or toward the down payment on the home.
Are You Thinking About Buying a Home in Irvine?
If you’re thinking of buying a home for sale in Irvine, call us at 949-385-1684 or get in touch with us online. Tell us what you want from your next home… we’ll help you find it.
In the meantime, check out our:
- Airport area real estate listings
- Central Park West homes for sale
- Columbus Grove homes for sale
- Cypress Village real estate listings
- Eastwood Village homes for sale
- El Camino Real homes for sale
- Great Park homes for sale
- Hidden Canyon real estate listings
- Laguna Altura real estate listings
- Northpark homes for sale
- Northpark Squre homes for sale
- Northwood homes for sale
- Northwood Pointe real estate listings
- Oak Creek real estate listings
- Orangetree homes for sale
- Orchard Hills homes for sale
- Portola Springs real estate listings
- Quail Hill real estate listings
- Rancho San Joaquin homes for sale
- Shady Canyon homes for sale
- Stonegate homes for sale
- Stonegate East homes for sale
- Turtle Ridge homes for sale
- Turtle Rock real estate listings
- University Park real estate listings
- University Town Center real estate listings
- Walnut Village homes for sale
- West Irvine real estate listings
- Westpark I homes for sale
- Westpark II homes for sale
- Woodbridge homes for sale
- Woodbury homes for sale
- Woodbury East homes for sale