What Is Earnest Monday & Why Do You Need It?
The world of real estate is as vast as it is exciting. Buying homes in Colorado Springs can be incredibly rewarding, but there are numerous little details that demand proper attention and consideration in order for you to be successful. The MacGuire Team is here to help you make sense of real estate with this insider info on some of the pieces that make up a real estate transaction. This week, we're delving into one of the pieces found at the very beginning of the process: earnest money.
The Background On Earnest Money
Earnest money is a check you provide when you submit your offer on the home you wish to purchase. This check is essentially a deposit designed to prove to the seller that you are seriously interested in purchasing the property. There is no magic number for the amount of earnest money you should provide, but it generally ranges from 1-3% of the home's total purchase price.
The earnest money you submit does not go straight to the seller. Rather, it will be held by an independent third party (such as a title company) until the sale is finalized. At closing, the money will be applied towards your down payment or your closing costs (depending on the type of financing you get).
The Importance Of Earnest Money
Earnest money is a crucial part of the home buying process because it shows the seller that you are serious about your offer. Determining the right amount of earnest money to submit requires careful strategizing, however. Too small of a check, and the sellers may not want to "waste their time" and could instead choose to hold out for a better offer. (If all other aspects of two offers are equal, the seller's will likely choose the offer with the bigger earnest money check.) On other hand, including too much earnest money could cause complications with your mortgage loan. Your Colorado Springs real estate agent will be able to help you strategize the proper amount to submit.
Questions About Real Estate?
Contact The MacGuire Team!
Real estate in Colorado Springs may be complex, but it does not have to be challenging or overwhelming! The MacGuire Team is committed to helping our clients achieve successful, rewarding, and seamless transactions. Give us a call for more information!
Mike@BuyWithMike.com
Mike MacGuire
Colorado Springs Real Estate Agent
The MacGuire Team
6760 Corporate Dr
Ste 300
Colorado Springs, CO 80919
719-536-4324 or 719-660-6793
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