The Home Buying Process Step 4: Your Earnest Money Deposit
The earnest-money deposit, also called a good faith deposit, is a fraction of the down payment, which indicates the buyer’s intent and willingness to purchase the property.
The buyer usually pays it in the form of a personal or certified check issued to the real estate brokerage. The real estate brokerage holds the check uncashed.
When the purchase offer is accepted, and a binding contract formed, the earnest money deposit is delivered to the escrow company, where it will be deposited into an escrow account, and held there until closing.
While no specific amount is included by law, in California an earnest money deposit of 3% is typical. There is no direct benefit to the seller whether your deposit is $1,000 or $100,000; but remember that a larger amount sends a message to the seller that you are serious about making the purchase, that you “earnestly” want to buy the property.
Would you like to know more? Call Bob Taylor Properties at 323-257-1080 or email at [email protected]