So, where does your initial deposit go, when you write an offer on a home.

YES!

You found the home you like, love, or fix up. Now it is time to write the offer. If this is your first time writing an offer, this may be a stressful time. You don't want to make a mistake, you may not understand everything in the purchase contract (yet) and you're wondering, ...perhaps... what will happen to my initial deposit or earnest money deposit as it is also called.

Well, there is only good news! Yay! No more sweaty palms!

The money will be cashed by the Escrow Company, generally within 3 business days after acceptance of your offer. This means the money, let's say $3,000.00, will not go directly to the seller. They will not spend it on icecream and toys before you even purchased the home. The $3,000.00 will become part of your total down payment! So, it is not extra money out of pocket for some obscure slush fund.

The next hurdle you may think of is, what happens with my $3,000.00 if I find out that the home is falling apart and we withdraw our offer. Great thought! After acceptance of your offer you have 17 days to do your due dilligence. Meaning, to find out everything there is to know about the home, do your home inspection, get the appraisal done and get your loan in place. If for whatever valid reason, let's say there are too many safety issues with the home that cannot be taken care of, you withdraw your offer before day 17 you will get your initial deposit of $3,000.00 back. (sometimes minus some administration fees)

However, if at day 17 you remove your contingencies and then after that time back out of the transaction; it will be very hard to get your initial deposit back.

Therefore, I will always help my clients to know well before day 17 what the shape the home is. Have the appraisal done, the loan in place etc. etc.

So, good news all around. You can be rest assured that when you buy your home with me, I will guide you every step of the way so you know what decision to make and when, and; feel good about it because you understand what you are doing!

Enjoy your home buying!

Robin Auwerda
562HomeGuy.com
Find me on YouTube!