The Ins and Outs of Earnest Money | #RealEstateTalk 005
The Ins and Outs of Earnest Money. What is Earnest Money? How much is Earnest Money? When is the Earnest Money provided?
What is Earnest Money? The money the buyer gives to the title company to show the seller that he is serious about purchasing the Spring Texas home.
How much is Earnest Money? Just like real estate is local so is the amount of the earnest money. In the Spring Texas area, earnest money is typically 1% of the sales price. The amount of the earnest money is a contractual term that is negotiated between the buyer and the seller. In a multiple offers situation, the seller may require the buyer to agree to earnest money that is more than 1% of the sales price.
When is the Earnest Money provided? Contractually the earnest money is required to be delivered and receipted by the title company within three days of the executed date of the contract. The title company will hold the earnest money in an escrow account and it will be applied to the buyers closing costs, prepaids, and down payment on closing day.